TERA WACC - Weighted Average Cost of Capital
The WACC of Gulf & Western Company Inc (TERA) is 15.9%.
| Range | Selected | |
| Cost of equity | 5.0% - 3915.0% | 1960% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 36.5% | 21.75% |
| WACC | 5.2% - 26.7% | 15.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -555.84 | 241.45 |
| Additional risk adjustments | 2558.0% | 2558.5% |
| Cost of equity | 5.0% | 3915.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 59345.55 | 59345.55 |
| Cost of debt | 7.0% | 36.5% |
| After-tax WACC | 5.2% | 26.7% |
| Selected WACC | 15.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TERA | Gulf & Western Company Inc | 59345.55 | -0.63 | 0 |
| CSKD | China Skyrise Digital Service Inc | 0.11 | -0.08 | -0.07 |
| CYF.V | Canyon Creek Food Company Ltd | 46.54 | 1.12 | 0.03 |
| GSFD | Global Seafood Technologies Inc | 1.05 | -1.19 | -0.67 |
| RCHN | Rouchon Industries Inc | 0.13 | 0.01 | 0.01 |
| SNF.V | Sunora Foods Inc | 0.01 | 0.02 | 0.02 |
| VFRM | Veritas Farms Inc | 87.92 | -1.56 | -0.02 |
| VULC | Vulcan International Corp | 23.06 | 0.46 | 0.03 |
| WWT.V | Water Ways Technologies Inc | 4.32 | -0.18 | -0.04 |
| Low | High | |
| Unlevered beta | -0.02 | 0.01 |
| Relevered beta | -830.1 | 359.88 |
| Adjusted relevered beta | -555.84 | 241.45 |
TERA'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 TERA:
cost_of_equity (1,960.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-555.84) + risk_adjustments (2,558.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.