CENX WACC - Weighted Average Cost of Capital

The WACC of Century Aluminum Co (CENX) is 10.2%.

The Cost of Equity of Century Aluminum Co (CENX) is 11.15%.

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

	Range	Selected
Cost of equity	9.40% - 12.90%	11.15%
Tax rate	10.30% - 18.00%	14.15%
Cost of debt	5.30% - 8.00%	6.65%
WACC	8.6% - 11.8%	10.2%

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	1.21	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	12.90%

Tax rate	10.30%	18.00%
Debt/Equity ratio	0.22	0.22
Cost of debt	5.30%	8.00%

After-tax WACC	8.6%	11.8%


Selected WACC	10.2%

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 (11.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.21) + 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.