X WACC - Weighted Average Cost of Capital
The WACC of United States Steel Corp (X) is 7.0%.
| Range | Selected | |
| Cost of equity | 6.7% - 10.2% | 8.45% |
| Tax rate | 11.7% - 13.2% | 12.45% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.8% - 8.3% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.62 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 10.2% |
| Tax rate | 11.7% | 13.2% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.8% | 8.3% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| X | United States Steel Corp | 0.43 | 1.26 | 0.91 |
| CMC | Commercial Metals Co | 0.23 | 1.28 | 1.07 |
| HAYN | Haynes International Inc | 0.16 | 0.19 | 0.16 |
| HUDI | Huadi International Group Co., Ltd. | 0.77 | 0.36 | 0.21 |
| NPT.CN | Plaintree Systems Inc | 16.15 | 1.28 | 0.08 |
| RYI | Ryerson Holding Corp | 0.73 | 1.11 | 0.68 |
| STLD | Steel Dynamics Inc | 0.17 | 1.3 | 1.13 |
| TX | Ternium SA | 0.43 | 0.53 | 0.39 |
| WEBC | Webco Industries Inc | 0.5 | 0.05 | 0.03 |
| WOR | Worthington Industries Inc | 0.1 | 0.72 | 0.66 |
| Low | High | |
| Unlevered beta | 0.32 | 0.67 |
| Relevered beta | 0.43 | 0.93 |
| Adjusted relevered beta | 0.62 | 0.95 |
X'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 X:
cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.62) + 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.