The WACC of AMG Advanced Metallurgical Group NV (AMG.AS) is 5.4%.
| Range | Selected | |
| Cost of equity | 4.50% - 8.10% | 6.30% |
| Tax rate | 37.50% - 42.50% | 40.00% |
| Cost of debt | 4.80% - 11.10% | 7.95% |
| WACC | 3.7% - 7.2% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.37 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.50% | 8.10% |
| Tax rate | 37.50% | 42.50% |
| Debt/Equity ratio | 1.16 | 1.16 |
| Cost of debt | 4.80% | 11.10% |
| After-tax WACC | 3.7% | 7.2% |
| Selected WACC | 5.4% | |
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 AMG.AS:
cost_of_equity (6.30%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (0.37) + 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.