SFL.MI WACC - Weighted Average Cost of Capital

The WACC of Safilo Group SpA (SFL.MI) is 9.4%.

The Cost of Equity of Safilo Group SpA (SFL.MI) is 10.35%.

The Cost of Debt of Safilo Group SpA (SFL.MI) is 4.30%.

	Range	Selected
Cost of equity	8.80% - 11.90%	10.35%
Tax rate	29.90% - 32.40%	31.15%
Cost of debt	4.10% - 4.50%	4.30%
WACC	8.0% - 10.7%	9.4%

WACC

SFL.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.61	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	11.90%

Tax rate	29.90%	32.40%
Debt/Equity ratio	0.15	0.15
Cost of debt	4.10%	4.50%

After-tax WACC	8.0%	10.7%


Selected WACC	9.4%

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 (10.35%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.61) + 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.