CTRA WACC - Weighted Average Cost of Capital
The WACC of Contura Energy Inc (CTRA) is 9.5%.
| Range | Selected | |
| Cost of equity | 9.2% - 12.0% | 10.6% |
| Tax rate | 19.5% - 22.0% | 20.75% |
| Cost of debt | 4.5% - 4.8% | 4.65% |
| WACC | 8.3% - 10.7% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.15 | 1.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.2% | 12.0% |
| Tax rate | 19.5% | 22.0% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 4.5% | 4.8% |
| After-tax WACC | 8.3% | 10.7% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CTRA | Contura Energy Inc | 0.18 | 0.68 | 0.59 |
| ATI | Allegheny Technologies Inc | 0.15 | 1.85 | 1.65 |
| CLF | Cleveland-Cliffs Inc | 1.53 | 1.97 | 0.89 |
| CMC | Commercial Metals Co | 0.2 | 1.35 | 1.16 |
| CRS | Carpenter Technology Corp | 0.05 | 1.83 | 1.76 |
| NUE | Nucor Corp | 0.21 | 1.43 | 1.23 |
| RS | Reliance Steel & Aluminum Co | 0.07 | 0.99 | 0.94 |
| STLD | Steel Dynamics Inc | 0.16 | 1.38 | 1.23 |
| WOR | Worthington Industries Inc | 0.1 | 0.87 | 0.81 |
| SGM.AX | Sims Ltd | 0.24 | 1.77 | 1.49 |
| Low | High | |
| Unlevered beta | 1.08 | 1.23 |
| Relevered beta | 1.22 | 1.4 |
| Adjusted relevered beta | 1.15 | 1.27 |
CTRA'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 CTRA:
cost_of_equity (10.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.15) + 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.