TDC
Teradata Corp
Price:  
22.07 
USD
Volume:  
664,108.00
United States | Software
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TDC WACC - Weighted Average Cost of Capital

The WACC of Teradata Corp (TDC) is 7.1%.

The Cost of Equity of Teradata Corp (TDC) is 8.25%.
The Cost of Debt of Teradata Corp (TDC) is 4.70%.

Range Selected
Cost of equity 6.50% - 10.00% 8.25%
Tax rate 40.40% - 48.50% 44.45%
Cost of debt 4.50% - 4.90% 4.70%
WACC 5.7% - 8.4% 7.1%
WACC

TDC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.57 0.92
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.50% 10.00%
Tax rate 40.40% 48.50%
Debt/Equity ratio 0.27 0.27
Cost of debt 4.50% 4.90%
After-tax WACC 5.7% 8.4%
Selected WACC 7.1%

TDC'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 TDC:

cost_of_equity (8.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.57) + 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.