XFAB.PA WACC - Weighted Average Cost of Capital

The WACC of X Fab Silicon Foundries EV (XFAB.PA) is 7.1%.

The Cost of Equity of X Fab Silicon Foundries EV (XFAB.PA) is 7.90%.

The Cost of Debt of X Fab Silicon Foundries EV (XFAB.PA) is 7.80%.

	Range	Selected
Cost of equity	6.60% - 9.20%	7.90%
Tax rate	21.30% - 25.80%	23.55%
Cost of debt	7.40% - 8.20%	7.80%
WACC	6.3% - 7.9%	7.1%

WACC

XFAB.PA WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.63	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.20%

Tax rate	21.30%	25.80%
Debt/Equity ratio	0.68	0.68
Cost of debt	7.40%	8.20%

After-tax WACC	6.3%	7.9%


Selected WACC	7.1%

XFAB.PA'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 XFAB.PA:

cost_of_equity (7.90%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.63) + 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.