CENX
Century Aluminum Co
Price:  
18.37 
USD
Volume:  
1,120,713.00
United States | Metals & Mining
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CENX WACC - Weighted Average Cost of Capital

The WACC of Century Aluminum Co (CENX) is 9.8%.

The Cost of Equity of Century Aluminum Co (CENX) is 11.10%.
The Cost of Debt of Century Aluminum Co (CENX) is 6.65%.

Range Selected
Cost of equity 9.70% - 12.50% 11.10%
Tax rate 10.30% - 18.00% 14.15%
Cost of debt 5.30% - 8.00% 6.65%
WACC 8.5% - 11.1% 9.8%
WACC

CENX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.26 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.70% 12.50%
Tax rate 10.30% 18.00%
Debt/Equity ratio 0.3 0.3
Cost of debt 5.30% 8.00%
After-tax WACC 8.5% 11.1%
Selected WACC 9.8%

CENX'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 CENX:

cost_of_equity (11.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.26) + 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.