LEU WACC - Weighted Average Cost of Capital

The WACC of Centrus Energy Corp (LEU) is 9.0%.

The Cost of Equity of Centrus Energy Corp (LEU) is 10.35%.

The Cost of Debt of Centrus Energy Corp (LEU) is 5.50%.

	Range	Selected
Cost of equity	7.50% - 13.20%	10.35%
Tax rate	5.80% - 14.90%	10.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.6% - 11.5%	9.0%

WACC

LEU 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	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	13.20%

Tax rate	5.80%	14.90%
Debt/Equity ratio	0.32	0.32
Cost of debt	4.00%	7.00%

After-tax WACC	6.6%	11.5%


Selected WACC	9.0%

LEU'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 LEU:

cost_of_equity (10.35%) = 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.