The WACC of Severstal' PAO (CHMF.ME) is 14.0%.
| Range | Selected | |
| Cost of equity | 23.50% - 48.70% | 36.10% |
| Tax rate | 20.20% - 21.00% | 20.60% |
| Cost of debt | 9.20% - 16.90% | 13.05% |
| WACC | 9.6% - 18.3% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.66 | 2.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 23.50% | 48.70% |
| Tax rate | 20.20% | 21.00% |
| Debt/Equity ratio | 6.12 | 6.12 |
| Cost of debt | 9.20% | 16.90% |
| After-tax WACC | 9.6% | 18.3% |
| Selected WACC | 14.0% | |
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 CHMF.ME:
cost_of_equity (36.10%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.66) + 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.