CCMP WACC - Weighted Average Cost of Capital
The WACC of CMC Materials Inc (CCMP) is 8.9%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.4% | 9.9% |
| Tax rate | 20.6% - 21.9% | 21.25% |
| Cost of debt | 4.2% - 4.5% | 4.35% |
| WACC | 7.6% - 10.1% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.23 | 1.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.4% |
| Tax rate | 20.6% | 21.9% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 4.2% | 4.5% |
| After-tax WACC | 7.6% | 10.1% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CCMP | CMC Materials Inc | 0.18 | 1.11 | 0.97 |
| ACMR | ACM Research Inc | 0.11 | 1.25 | 1.15 |
| AEIS | Advanced Energy Industries Inc | 0.11 | 1.92 | 1.76 |
| BRKS | Brooks Automation Inc | 0.01 | 1.74 | 1.73 |
| COHU | Cohu Inc | 0.02 | 1.74 | 1.71 |
| FORM | FormFactor Inc | 0 | 2.1 | 2.09 |
| NVMI | Nova Measuring Instruments Ltd | 0.02 | 1.74 | 1.71 |
| PLAB | Photronics Inc | 0.02 | 1.52 | 1.5 |
| UCTT | Ultra Clean Holdings Inc | 0.48 | 2.17 | 1.57 |
| VECO | Veeco Instruments Inc | 0.22 | 1.52 | 1.29 |
| Low | High | |
| Unlevered beta | 1.55 | 1.71 |
| Relevered beta | 1.34 | 1.55 |
| Adjusted relevered beta | 1.23 | 1.37 |
CCMP'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 CCMP:
cost_of_equity (9.90%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.23) + 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.