METC WACC - Weighted Average Cost of Capital
The WACC of Ramaco Resources Inc (METC) is 9.5%.
| Range | Selected | |
| Cost of equity | 7.8% - 11.4% | 9.6% |
| Tax rate | 21.1% - 22.8% | 21.95% |
| Cost of debt | 7.9% - 15.6% | 11.75% |
| WACC | 7.6% - 11.5% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.86 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 11.4% |
| Tax rate | 21.1% | 22.8% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 7.9% | 15.6% |
| After-tax WACC | 7.6% | 11.5% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| METC | Ramaco Resources Inc | 0.18 | -0.02 | -0.01 |
| AMR | Alpha Metallurgical Resources Inc | 0 | 1.73 | 1.72 |
| CAD.V | Colonial Coal International Corp | 0 | 1.32 | 1.32 |
| CAF.V | Canaf Investments Inc | 0 | 0.62 | 0.62 |
| CNT.TO | Century Global Commodities Corp | 0.03 | 0.33 | 0.32 |
| CSO.V | Corsa Coal Corp | 1.3 | 1.51 | 0.75 |
| DNG.TO | Dynacor Gold Mines Inc | 0.01 | 1.02 | 1.01 |
| HCC | Warrior Met Coal Inc | 0.08 | 1.71 | 1.61 |
| MND.TO | Mandalay Resources Corp | 0.02 | 1.22 | 1.2 |
| PVMCF | Pine Valley Mining Corp | 0.34 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.7 | 1.09 |
| Relevered beta | 0.79 | 1.24 |
| Adjusted relevered beta | 0.86 | 1.16 |
METC'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 METC:
cost_of_equity (9.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.86) + 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.