AMR WACC - Weighted Average Cost of Capital
The WACC of Alpha Metallurgical Resources Inc (AMR) is 11.2%.
| Range | Selected | |
| Cost of equity | 10.0% - 12.4% | 11.2% |
| Tax rate | 4.6% - 8.5% | 6.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 10.0% - 12.4% | 11.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.33 | 1.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 12.4% |
| Tax rate | 4.6% | 8.5% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 10.0% | 12.4% |
| Selected WACC | 11.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AMR | Alpha Metallurgical Resources Inc | 0 | 1.55 | 1.54 |
| ATI | Allegheny Technologies Inc | 0.19 | 1.86 | 1.58 |
| CAD.V | Colonial Coal International Corp | 0 | 1.49 | 1.49 |
| CAF.V | Canaf Investments Inc | 0 | 0.62 | 0.61 |
| CG.TO | Centerra Gold Inc | 0.01 | 1.51 | 1.49 |
| CRS | Carpenter Technology Corp | 0.07 | 1.73 | 1.63 |
| CSO.V | Corsa Coal Corp | 1.32 | 1.51 | 0.68 |
| HCC | Warrior Met Coal Inc | 0.07 | 1.6 | 1.5 |
| METC | Ramaco Resources Inc | 0.18 | 1.93 | 1.65 |
| PVMCF | Pine Valley Mining Corp | 0.34 | 0 | 0 |
| Low | High | |
| Unlevered beta | 1.49 | 1.52 |
| Relevered beta | 1.49 | 1.52 |
| Adjusted relevered beta | 1.33 | 1.35 |
AMR'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 AMR:
cost_of_equity (11.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.33) + 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.