XFAB.PA WACC - Weighted Average Cost of Capital

The WACC of X Fab Silicon Foundries EV (XFAB.PA) is 9.0%.

The Cost of Equity of X Fab Silicon Foundries EV (XFAB.PA) is 10.20%.

The Cost of Debt of X Fab Silicon Foundries EV (XFAB.PA) is 9.30%.

	Range	Selected
Cost of equity	8.30% - 12.10%	10.20%
Tax rate	21.30% - 25.80%	23.55%
Cost of debt	7.00% - 11.60%	9.30%
WACC	7.3% - 10.8%	9.0%

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	0.91	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	12.10%

Tax rate	21.30%	25.80%
Debt/Equity ratio	0.59	0.59
Cost of debt	7.00%	11.60%

After-tax WACC	7.3%	10.8%


Selected WACC	9.0%

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 (10.20%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.91) + 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.