EAF WACC - Weighted Average Cost of Capital
The WACC of GrafTech International Ltd (EAF) is 7.2%.
| Range | Selected | |
| Cost of equity | 10.3% - 22.2% | 16.25% |
| Tax rate | 14.7% - 14.9% | 14.8% |
| Cost of debt | 5.3% - 7.0% | 6.15% |
| WACC | 5.5% - 8.9% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.4 | 3.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.3% | 22.2% |
| Tax rate | 14.7% | 14.9% |
| Debt/Equity ratio | 4.61 | 4.61 |
| Cost of debt | 5.3% | 7.0% |
| After-tax WACC | 5.5% | 8.9% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EAF | GrafTech International Ltd | 4.61 | 2.21 | 0.45 |
| AMOT | Allied Motion Technologies Inc | 0.43 | 1.71 | 1.25 |
| APWC | Asia Pacific Wire & Cable Corporation Ltd | 0.97 | 0.13 | 0.07 |
| ARRY | Array Technologies Inc | 0.58 | 0.44 | 0.3 |
| ATKR | Atkore Inc | 0.33 | 1.37 | 1.07 |
| FCEL | Fuelcell Energy Inc | 1.51 | 0.33 | 0.14 |
| NVT | nVent Electric PLC | 0.2 | 1.96 | 1.68 |
| PLPC | Preformed Line Products Co | 0.04 | 0.75 | 0.72 |
| SHLS | Shoals Technologies Group Inc | 0.17 | 0.39 | 0.34 |
| SVT | Servotronics Inc | 0.08 | 0.19 | 0.17 |
| THR | Thermon Group Holdings Inc | 0.17 | 1.16 | 1.01 |
| Low | High | |
| Unlevered beta | 0.34 | 0.72 |
| Relevered beta | 1.6 | 4.13 |
| Adjusted relevered beta | 1.4 | 3.1 |
EAF'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 EAF:
cost_of_equity (16.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.4) + 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.