ATI
Allegheny Technologies Inc
Price:  
66.57 
USD
Volume:  
4,012,109.00
United States | Metals & Mining
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ATI WACC - Weighted Average Cost of Capital

The WACC of Allegheny Technologies Inc (ATI) is 8.6%.

The Cost of Equity of Allegheny Technologies Inc (ATI) is 9.45%.
The Cost of Debt of Allegheny Technologies Inc (ATI) is 5.65%.

Range Selected
Cost of equity 8.10% - 10.80% 9.45%
Tax rate 16.60% - 30.10% 23.35%
Cost of debt 5.30% - 6.00% 5.65%
WACC 7.5% - 9.7% 8.6%
WACC

ATI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.92 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.80%
Tax rate 16.60% 30.10%
Debt/Equity ratio 0.2 0.2
Cost of debt 5.30% 6.00%
After-tax WACC 7.5% 9.7%
Selected WACC 8.6%

ATI'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 ATI:

cost_of_equity (9.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.92) + 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.