KALU
Kaiser Aluminum Corp
Price:  
85.64 
USD
Volume:  
67,310.00
United States | Metals & Mining
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KALU WACC - Weighted Average Cost of Capital

The WACC of Kaiser Aluminum Corp (KALU) is 7.5%.

The Cost of Equity of Kaiser Aluminum Corp (KALU) is 9.85%.
The Cost of Debt of Kaiser Aluminum Corp (KALU) is 5.75%.

Range Selected
Cost of equity 7.50% - 12.20% 9.85%
Tax rate 22.50% - 24.10% 23.30%
Cost of debt 4.00% - 7.50% 5.75%
WACC 5.6% - 9.4% 7.5%
WACC

KALU WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.8 1.31
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 12.20%
Tax rate 22.50% 24.10%
Debt/Equity ratio 0.76 0.76
Cost of debt 4.00% 7.50%
After-tax WACC 5.6% 9.4%
Selected WACC 7.5%

KALU'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 KALU:

cost_of_equity (9.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.8) + 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.