PBF
PBF Energy Inc
Price:  
19.42 
USD
Volume:  
2,890,440.00
United States | Oil, Gas & Consumable Fuels
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PBF WACC - Weighted Average Cost of Capital

The WACC of PBF Energy Inc (PBF) is 7.3%.

The Cost of Equity of PBF Energy Inc (PBF) is 8.50%.
The Cost of Debt of PBF Energy Inc (PBF) is 6.55%.

Range Selected
Cost of equity 6.70% - 10.30% 8.50%
Tax rate 11.30% - 19.90% 15.60%
Cost of debt 6.10% - 7.00% 6.55%
WACC 6.2% - 8.5% 7.3%
WACC

PBF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.63 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 10.30%
Tax rate 11.30% 19.90%
Debt/Equity ratio 0.64 0.64
Cost of debt 6.10% 7.00%
After-tax WACC 6.2% 8.5%
Selected WACC 7.3%

PBF'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 PBF:

cost_of_equity (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.63) + 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.