CLF
Cleveland-Cliffs Inc
Price:  
5.90 
USD
Volume:  
34,709,890.00
United States | Metals & Mining
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CLF WACC - Weighted Average Cost of Capital

The WACC of Cleveland-Cliffs Inc (CLF) is 9.3%.

The Cost of Equity of Cleveland-Cliffs Inc (CLF) is 19.85%.
The Cost of Debt of Cleveland-Cliffs Inc (CLF) is 6.40%.

Range Selected
Cost of equity 17.10% - 22.60% 19.85%
Tax rate 24.30% - 24.80% 24.55%
Cost of debt 5.80% - 7.00% 6.40%
WACC 8.2% - 10.5% 9.3%
WACC

CLF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2.89 3.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 17.10% 22.60%
Tax rate 24.30% 24.80%
Debt/Equity ratio 2.32 2.32
Cost of debt 5.80% 7.00%
After-tax WACC 8.2% 10.5%
Selected WACC 9.3%

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 (19.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.89) + 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.