WOR WACC - Weighted Average Cost of Capital
The WACC of Worthington Industries Inc (WOR) is 8.0%.
| Range | Selected | |
| Cost of equity | 6.8% - 9.5% | 8.15% |
| Tax rate | 22.0% - 22.9% | 22.45% |
| Cost of debt | 4.0% - 12.4% | 8.2% |
| WACC | 6.4% - 9.5% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.64 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 9.5% |
| Tax rate | 22.0% | 22.9% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.0% | 12.4% |
| After-tax WACC | 6.4% | 9.5% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| WOR | Worthington Industries Inc | 0.1 | 0.7 | 0.65 |
| STLN.SW | Swiss Steel Holding AG | 18.64 | -1.75 | -0.11 |
| ATCV | ATC Venture Group Inc | 1.91 | 0.93 | 0.37 |
| ATI | Allegheny Technologies Inc | 0.18 | 1.8 | 1.58 |
| CRS | Carpenter Technology Corp | 0.06 | 1.73 | 1.65 |
| NPT.CN | Plaintree Systems Inc | 14.9 | 1.02 | 0.08 |
| RYI | Ryerson Holding Corp | 0.73 | 1.11 | 0.71 |
| STLC.TO | Stelco Holdings Inc | 0.14 | 0.94 | 0.85 |
| SXC | SunCoke Energy Inc | 0.69 | 1.06 | 0.69 |
| WEBC | Webco Industries Inc | 0.5 | 0.07 | 0.05 |
| Low | High | |
| Unlevered beta | 0.54 | 0.7 |
| Relevered beta | 0.46 | 0.76 |
| Adjusted relevered beta | 0.64 | 0.84 |
WOR'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 WOR:
cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.