ASIX
AdvanSix Inc
Price:  
23.27 
USD
Volume:  
250,865.00
United States | Chemicals
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AdvanSix WACC - Weighted Average Cost of Capital

The WACC of AdvanSix Inc (ASIX) is 7.6%.

The Cost of Equity of AdvanSix Inc (ASIX) is 8.90%.
The Cost of Debt of AdvanSix Inc (ASIX) is 4.55%.

Range Selected
Cost of equity 7.40% - 10.40% 8.90%
Tax rate 19.20% - 22.20% 20.70%
Cost of debt 4.00% - 5.10% 4.55%
WACC 6.4% - 8.8% 7.6%
WACC

AdvanSix WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.77 0.99
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.40%
Tax rate 19.20% 22.20%
Debt/Equity ratio 0.32 0.32
Cost of debt 4.00% 5.10%
After-tax WACC 6.4% 8.8%
Selected WACC 7.6%

AdvanSix'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 AdvanSix:

cost_of_equity (8.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.