ADNT
Adient PLC
Price:  
18.87 
USD
Volume:  
2,630,400.00
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Adient WACC - Weighted Average Cost of Capital

The WACC of Adient PLC (ADNT) is 6.6%.

The Cost of Equity of Adient PLC (ADNT) is 10.45%.
The Cost of Debt of Adient PLC (ADNT) is 5.00%.

Range Selected
Cost of equity 8.70% - 12.20% 10.45%
Tax rate 15.70% - 20.00% 17.85%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.0% - 7.3% 6.6%
WACC

Adient WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.05 1.32
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 12.20%
Tax rate 15.70% 20.00%
Debt/Equity ratio 1.52 1.52
Cost of debt 5.00% 5.00%
After-tax WACC 6.0% 7.3%
Selected WACC 6.6%

Adient'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 Adient:

cost_of_equity (10.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.05) + 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.