CLF
Cleveland-Cliffs Inc
Price:  
8.76 
USD
Volume:  
47,876,864
United States | Metals & Mining

CLF WACC - Weighted Average Cost of Capital

The WACC of Cleveland-Cliffs Inc (CLF) is 8.9%.

The Cost of Equity of Cleveland-Cliffs Inc (CLF) is 17.15%.
The Cost of Debt of Cleveland-Cliffs Inc (CLF) is 6.4%.

RangeSelected
Cost of equity13.9% - 20.4%17.15%
Tax rate24.3% - 24.8%24.55%
Cost of debt5.8% - 7.0%6.4%
WACC7.5% - 10.3%8.9%
WACC

CLF WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta2.192.78
Additional risk adjustments0.0%0.5%
Cost of equity13.9%20.4%
Tax rate24.3%24.8%
Debt/Equity ratio
2.032.03
Cost of debt5.8%7.0%
After-tax WACC7.5%10.3%
Selected WACC8.9%

CLF'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 CLF:

cost_of_equity (17.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.19) + 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.