SFD.WA WACC - Weighted Average Cost of Capital

The WACC of SFD SA (SFD.WA) is 8.5%.

The Cost of Equity of SFD SA (SFD.WA) is 8.65%.

The Cost of Debt of SFD SA (SFD.WA) is 11.40%.

	Range	Selected
Cost of equity	7.90% - 9.40%	8.65%
Tax rate	20.60% - 35.00%	27.80%
Cost of debt	8.80% - 14.00%	11.40%
WACC	7.7% - 9.3%	8.5%

WACC

SFD.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.37	0.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	9.40%

Tax rate	20.60%	35.00%
Debt/Equity ratio	0.21	0.21
Cost of debt	8.80%	14.00%

After-tax WACC	7.7%	9.3%


Selected WACC	8.5%

SFD.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 SFD.WA:

cost_of_equity (8.65%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.37) + 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.