AMR
Alpha Metallurgical Resources Inc
Price:  
115.64 
USD
Volume:  
220,025.00
United States | Metals & Mining
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AMR WACC - Weighted Average Cost of Capital

The WACC of Alpha Metallurgical Resources Inc (AMR) is 11.0%.

The Cost of Equity of Alpha Metallurgical Resources Inc (AMR) is 11.05%.
The Cost of Debt of Alpha Metallurgical Resources Inc (AMR) is 5.00%.

Range Selected
Cost of equity 9.60% - 12.50% 11.05%
Tax rate 4.60% - 8.50% 6.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.6% - 12.5% 11.0%
WACC

AMR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.25 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.50%
Tax rate 4.60% 8.50%
Debt/Equity ratio 0 0
Cost of debt 5.00% 5.00%
After-tax WACC 9.6% 12.5%
Selected WACC 11.0%

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 (11.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.25) + 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.