MT.AS WACC - Weighted Average Cost of Capital

The WACC of ArcelorMittal SA (MT.AS) is 7.5%.

The Cost of Equity of ArcelorMittal SA (MT.AS) is 9.20%.

The Cost of Debt of ArcelorMittal SA (MT.AS) is 4.25%.

	Range	Selected
Cost of equity	8.00% - 10.40%	9.20%
Tax rate	17.40% - 32.40%	24.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.7% - 8.3%	7.5%

WACC

MT.AS WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.07	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	10.40%

Tax rate	17.40%	32.40%
Debt/Equity ratio	0.39	0.39
Cost of debt	4.00%	4.50%

After-tax WACC	6.7%	8.3%


Selected WACC	7.5%

MT.AS'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 MT.AS:

cost_of_equity (9.20%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (1.07) + 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.