ASH WACC - Weighted Average Cost of Capital

The WACC of Ashland Global Holdings Inc. (ASH) is 8.7%.

The Cost of Equity of Ashland Global Holdings Inc. (ASH) is 11.30%.

The Cost of Debt of Ashland Global Holdings Inc. (ASH) is 4.80%.

	Range	Selected
Cost of equity	9.50% - 13.10%	11.30%
Tax rate	9.30% - 18.50%	13.90%
Cost of debt	4.00% - 5.60%	4.80%
WACC	7.3% - 10.0%	8.7%

WACC

ASH WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.22	1.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	13.10%

Tax rate	9.30%	18.50%
Debt/Equity ratio	0.58	0.58
Cost of debt	4.00%	5.60%

After-tax WACC	7.3%	10.0%


Selected WACC	8.7%

ASH'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 ASH:

cost_of_equity (11.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.22) + 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.