CMP
Compass Minerals International Inc
Price:  
20.54 
USD
Volume:  
535,249.00
United States | Metals & Mining
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CMP WACC - Weighted Average Cost of Capital

The WACC of Compass Minerals International Inc (CMP) is 8.1%.

The Cost of Equity of Compass Minerals International Inc (CMP) is 8.50%.
The Cost of Debt of Compass Minerals International Inc (CMP) is 13.25%.

Range Selected
Cost of equity 6.40% - 10.60% 8.50%
Tax rate 27.90% - 46.10% 37.00%
Cost of debt 5.60% - 20.90% 13.25%
WACC 5.2% - 10.9% 8.1%
WACC

CMP WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.55 1.03
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 10.60%
Tax rate 27.90% 46.10%
Debt/Equity ratio 1.09 1.09
Cost of debt 5.60% 20.90%
After-tax WACC 5.2% 10.9%
Selected WACC 8.1%

CMP'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 CMP:

cost_of_equity (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.55) + 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.