ST
Sensata Technologies Holding PLC
Price:  
22.07 
USD
Volume:  
1,114,847.00
United States | Electrical Equipment
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ST WACC - Weighted Average Cost of Capital

The WACC of Sensata Technologies Holding PLC (ST) is 8.4%.

The Cost of Equity of Sensata Technologies Holding PLC (ST) is 12.90%.
The Cost of Debt of Sensata Technologies Holding PLC (ST) is 5.30%.

Range Selected
Cost of equity 11.30% - 14.50% 12.90%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.50% - 6.10% 5.30%
WACC 7.3% - 9.5% 8.4%
WACC

ST WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.61 1.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.30% 14.50%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.99 0.99
Cost of debt 4.50% 6.10%
After-tax WACC 7.3% 9.5%
Selected WACC 8.4%

ST'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 ST:

cost_of_equity (12.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.61) + 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.