Avient WACC - Weighted Average Cost of Capital
The WACC of Avient Corp (AVNT) is 7.5%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.3% | 9.85% |
| Tax rate | 19.5% - 24.6% | 22.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 8.3% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.99 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.3% |
| Tax rate | 19.5% | 24.6% |
| Debt/Equity ratio | 0.66 | 0.66 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 8.3% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AVNT | Avient Corp | 0.66 | 1.45 | 0.97 |
| ASH | Ashland Global Holdings Inc. | 0.55 | 1.05 | 0.74 |
| AXTA | Axalta Coating Systems Ltd | 0.51 | 0.93 | 0.67 |
| ESI | Element Solutions Inc | 0.3 | 1.25 | 1.02 |
| FUL | HB Fuller Co | 0.59 | 0.9 | 0.63 |
| GRA | W R Grace & Co | 0.43 | 1.44 | 1.08 |
| NEU | NewMarket Corp | 0.14 | 0.67 | 0.6 |
| SCL | Stepan Co | 0.47 | 1.28 | 0.94 |
| VNTR | Venator Materials PLC | 36.06 | 1.74 | 0.06 |
| VVV | Valvoline Inc | 0.27 | 0.7 | 0.58 |
| Low | High | |
| Unlevered beta | 0.65 | 0.82 |
| Relevered beta | 0.99 | 1.22 |
| Adjusted relevered beta | 0.99 | 1.15 |
Avient'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 Avient:
cost_of_equity (9.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.99) + 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.