SFL.MI
Safilo Group SpA
Price:  
0.92 
EUR
Volume:  
379,416
Italy | Textiles, Apparel & Luxury Goods

SFL.MI WACC - Weighted Average Cost of Capital

The WACC of Safilo Group SpA (SFL.MI) is 8.5%.

The Cost of Equity of Safilo Group SpA (SFL.MI) is 10.4%.
The Cost of Debt of Safilo Group SpA (SFL.MI) is 4.45%.

RangeSelected
Cost of equity8.1% - 12.7%10.4%
Tax rate26.1% - 32.4%29.25%
Cost of debt4.0% - 4.9%4.45%
WACC6.8% - 10.3%8.5%
WACC

SFL.MI WACC calculation

CategoryLowHigh
Long-term bond rate3.7%4.2%
Equity market risk premium8.3%9.3%
Adjusted beta0.530.87
Additional risk adjustments0.0%0.5%
Cost of equity8.1%12.7%
Tax rate26.1%32.4%
Debt/Equity ratio
0.340.34
Cost of debt4.0%4.9%
After-tax WACC6.8%10.3%
Selected WACC8.5%

SFL.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 SFL.MI:

cost_of_equity (10.40%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.53) + 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.