RYI WACC - Weighted Average Cost of Capital

The WACC of Ryerson Holding Corp (RYI) is 9.1%.

The Cost of Equity of Ryerson Holding Corp (RYI) is 9.35%.

The Cost of Debt of Ryerson Holding Corp (RYI) is 11.45%.

	Range	Selected
Cost of equity	7.50% - 11.20%	9.35%
Tax rate	24.30% - 24.70%	24.50%
Cost of debt	7.30% - 15.60%	11.45%
WACC	6.7% - 11.4%	9.1%

WACC

RYI 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	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	11.20%

Tax rate	24.30%	24.70%
Debt/Equity ratio	0.72	0.72
Cost of debt	7.30%	15.60%

After-tax WACC	6.7%	11.4%


Selected WACC	9.1%

RYI'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 RYI:

cost_of_equity (9.35%) = 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.