AMD
Advanced Micro Devices Inc
Price:  
98.62 
USD
Volume:  
46,989,680.00
United States | Semiconductors & Semiconductor Equipment
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

AMD WACC - Weighted Average Cost of Capital

The WACC of Advanced Micro Devices Inc (AMD) is 9.7%.

The Cost of Equity of Advanced Micro Devices Inc (AMD) is 9.75%.
The Cost of Debt of Advanced Micro Devices Inc (AMD) is 7.40%.

Range Selected
Cost of equity 8.30% - 11.20% 9.75%
Tax rate 17.10% - 39.60% 28.35%
Cost of debt 4.50% - 10.30% 7.40%
WACC 8.2% - 11.2% 9.7%
WACC

AMD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.96 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 11.20%
Tax rate 17.10% 39.60%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.50% 10.30%
After-tax WACC 8.2% 11.2%
Selected WACC 9.7%

AMD'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 AMD:

cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.96) + 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.