SAF.PA
Safran SA
Price:  
285.3 
EUR
Volume:  
392,422
France | Aerospace & Defense

SAF.PA WACC - Weighted Average Cost of Capital

The WACC of Safran SA (SAF.PA) is 8.6%.

The Cost of Equity of Safran SA (SAF.PA) is 8.85%.
The Cost of Debt of Safran SA (SAF.PA) is 5%.

RangeSelected
Cost of equity7.7% - 10.0%8.85%
Tax rate29.8% - 32.6%31.2%
Cost of debt5.0% - 5.0%5%
WACC7.5% - 9.7%8.6%
WACC

SAF.PA WACC calculation

CategoryLowHigh
Long-term bond rate3.0%3.5%
Equity market risk premium5.8%6.8%
Adjusted beta0.810.88
Additional risk adjustments0.0%0.5%
Cost of equity7.7%10.0%
Tax rate29.8%32.6%
Debt/Equity ratio
0.040.04
Cost of debt5.0%5.0%
After-tax WACC7.5%9.7%
Selected WACC8.6%

SAF.PA'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 SAF.PA:

cost_of_equity (8.85%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.81) + 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.