SFER.MI WACC - Weighted Average Cost of Capital

The WACC of Salvatore Ferragamo SpA (SFER.MI) is 7.5%.

The Cost of Equity of Salvatore Ferragamo SpA (SFER.MI) is 10.40%.

The Cost of Debt of Salvatore Ferragamo SpA (SFER.MI) is 5.50%.

	Range	Selected
Cost of equity	7.60% - 13.20%	10.40%
Tax rate	21.80% - 31.90%	26.85%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.6% - 9.4%	7.5%

WACC

SFER.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	13.20%

Tax rate	21.80%	31.90%
Debt/Equity ratio	0.83	0.83
Cost of debt	4.00%	7.00%

After-tax WACC	5.6%	9.4%


Selected WACC	7.5%

SFER.MI'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 SFER.MI:

cost_of_equity (10.40%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.