PFC.L
Petrofac Ltd
Price:  
3.98 
GBP
Volume:  
31,706,896.00
Jersey | Energy Equipment & Services
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PFC.L WACC - Weighted Average Cost of Capital

The WACC of Petrofac Ltd (PFC.L) is 7.9%.

The Cost of Equity of Petrofac Ltd (PFC.L) is 60.15%.
The Cost of Debt of Petrofac Ltd (PFC.L) is 6.65%.

Range Selected
Cost of equity 45.80% - 74.50% 60.15%
Tax rate 3.30% - 7.00% 5.15%
Cost of debt 6.30% - 7.00% 6.65%
WACC 7.3% - 8.5% 7.9%
WACC

PFC.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 6.99 9.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 45.80% 74.50%
Tax rate 3.30% 7.00%
Debt/Equity ratio 32.95 32.95
Cost of debt 6.30% 7.00%
After-tax WACC 7.3% 8.5%
Selected WACC 7.9%

PFC.L'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 PFC.L:

cost_of_equity (60.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (6.99) + 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.