SFER.MI WACC - Weighted Average Cost of Capital
The WACC of Salvatore Ferragamo SpA (SFER.MI) is 7.5%.
| Range | Selected | |
| Cost of equity | 7.3% - 13.3% | 10.3% |
| Tax rate | 21.8% - 31.9% | 26.85% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.5% - 9.6% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.43 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 13.3% |
| Tax rate | 21.8% | 31.9% |
| Debt/Equity ratio | 0.78 | 0.78 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.5% | 9.6% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SFER.MI | Salvatore Ferragamo SpA | 0.78 | 1.16 | 0.75 |
| ALDAR.PA | Damartex SA | 4.74 | 0.54 | 0.12 |
| BC.MI | Brunello Cucinelli SpA | 0.13 | 0.84 | 0.77 |
| CSP.MI | CSP International Fashion Group SpA | 1.64 | 0.04 | 0.02 |
| EAH.WA | Esotiq & Henderson SA | 0.42 | -0.05 | -0.04 |
| MUL.L | Mulberry Group PLC | 1.41 | 0.08 | 0.04 |
| NEWA B.ST | New Wave Group AB | 0.15 | 1.03 | 0.93 |
| OVS.MI | OVS SpA | 1.4 | 0.92 | 0.46 |
| PQ.MI | Piquadro SpA | 0.66 | 0.09 | 0.06 |
| SFL.MI | Safilo Group SpA | 0.33 | 1.32 | 1.07 |
| Low | High | |
| Unlevered beta | 0.1 | 0.58 |
| Relevered beta | 0.15 | 0.9 |
| Adjusted relevered beta | 0.43 | 0.93 |
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 (10.30%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.43) + 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.