CCMP
CMC Materials Inc
Price:  
173.69 
USD
Volume:  
4,160,260.00
United States | Semiconductors & Semiconductor Equipment
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CCMP WACC - Weighted Average Cost of Capital

The WACC of CMC Materials Inc (CCMP) is 8.9%.

The Cost of Equity of CMC Materials Inc (CCMP) is 9.90%.
The Cost of Debt of CMC Materials Inc (CCMP) is 4.35%.

Range Selected
Cost of equity 8.40% - 11.40% 9.90%
Tax rate 20.60% - 21.90% 21.25%
Cost of debt 4.20% - 4.50% 4.35%
WACC 7.6% - 10.1% 8.9%
WACC

CCMP WACC calculation

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 8.40% 11.40%
Tax rate 20.60% 21.90%
Debt/Equity ratio 0.18 0.18
Cost of debt 4.20% 4.50%
After-tax WACC 7.6% 10.1%
Selected WACC 8.9%

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.