MFO.WA WACC - Weighted Average Cost of Capital

The WACC of MFO SA (MFO.WA) is 9.7%.

The Cost of Equity of MFO SA (MFO.WA) is 10.80%.

The Cost of Debt of MFO SA (MFO.WA) is 7.85%.

	Range	Selected
Cost of equity	9.20% - 12.40%	10.80%
Tax rate	16.40% - 18.70%	17.55%
Cost of debt	7.10% - 8.60%	7.85%
WACC	8.3% - 11.0%	9.7%

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	0.58	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.40%

Tax rate	16.40%	18.70%
Debt/Equity ratio	0.36	0.36
Cost of debt	7.10%	8.60%

After-tax WACC	8.3%	11.0%


Selected WACC	9.7%

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 (10.80%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.58) + 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.