XFAB.PA WACC - Weighted Average Cost of Capital

The WACC of X Fab Silicon Foundries EV (XFAB.PA) is 8.6%.

The Cost of Equity of X Fab Silicon Foundries EV (XFAB.PA) is 10.40%.

The Cost of Debt of X Fab Silicon Foundries EV (XFAB.PA) is 5.30%.

	Range	Selected
Cost of equity	7.60% - 13.20%	10.40%
Tax rate	19.70% - 24.20%	21.95%
Cost of debt	4.00% - 6.60%	5.30%
WACC	6.3% - 10.8%	8.6%

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	0.8	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	13.20%

Tax rate	19.70%	24.20%
Debt/Equity ratio	0.41	0.41
Cost of debt	4.00%	6.60%

After-tax WACC	6.3%	10.8%


Selected WACC	8.6%

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 (10.40%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.8) + 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.