MFO.WA WACC - Weighted Average Cost of Capital

The WACC of MFO SA (MFO.WA) is 8.7%.

The Cost of Equity of MFO SA (MFO.WA) is 9.35%.

The Cost of Debt of MFO SA (MFO.WA) is 8.85%.

	Range	Selected
Cost of equity	7.90% - 10.80%	9.35%
Tax rate	12.80% - 15.30%	14.05%
Cost of debt	8.60% - 9.10%	8.85%
WACC	7.8% - 9.5%	8.7%

WACC

MFO.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.38	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.80%

Tax rate	12.80%	15.30%
Debt/Equity ratio	0.7	0.7
Cost of debt	8.60%	9.10%

After-tax WACC	7.8%	9.5%


Selected WACC	8.7%

MFO.WA's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for MFO.WA:

cost_of_equity (9.35%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.38) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.