TEN
Tenneco Inc
Price:  
20.72 
USD
Volume:  
540,045.00
United States | Auto Components
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TEN WACC - Weighted Average Cost of Capital

The WACC of Tenneco Inc (TEN) is 6.2%.

The Cost of Equity of Tenneco Inc (TEN) is 14.10%.
The Cost of Debt of Tenneco Inc (TEN) is 7.50%.

Range Selected
Cost of equity 10.40% - 17.80% 14.10%
Tax rate 21.70% - 36.30% 29.00%
Cost of debt 5.90% - 9.10% 7.50%
WACC 5.2% - 7.1% 6.2%
WACC

TEN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.41 2.31
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.40% 17.80%
Tax rate 21.70% 36.30%
Debt/Equity ratio 8.13 8.13
Cost of debt 5.90% 9.10%
After-tax WACC 5.2% 7.1%
Selected WACC 6.2%

TEN'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 TEN:

cost_of_equity (14.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.41) + 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.