TDC
Teradata Corp
Price:  
21.43 
USD
Volume:  
797,572
United States | Software

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 8.4%.
The Cost of Debt of Teradata Corp (TDC) is 4.7%.

RangeSelected
Cost of equity6.5% - 10.3%8.4%
Tax rate40.4% - 48.5%44.45%
Cost of debt4.5% - 4.9%4.7%
WACC5.7% - 8.6%7.1%
WACC

TDC WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.570.96
Additional risk adjustments0.0%0.5%
Cost of equity6.5%10.3%
Tax rate40.4%48.5%
Debt/Equity ratio
0.280.28
Cost of debt4.5%4.9%
After-tax WACC5.7%8.6%
Selected WACC7.1%

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 (8.40%) = 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.