TEX
Terex Corp
Price:  
40.49 
USD
Volume:  
1,172,504.00
United States | Machinery
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

Terex WACC - Weighted Average Cost of Capital

The WACC of Terex Corp (TEX) is 8.2%.

The Cost of Equity of Terex Corp (TEX) is 12.30%.
The Cost of Debt of Terex Corp (TEX) is 5.00%.

Range Selected
Cost of equity 10.40% - 14.20% 12.30%
Tax rate 17.80% - 18.00% 17.90%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.3% - 9.2% 8.2%
WACC

Terex WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.42 1.67
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.40% 14.20%
Tax rate 17.80% 18.00%
Debt/Equity ratio 0.98 0.98
Cost of debt 5.00% 5.00%
After-tax WACC 7.3% 9.2%
Selected WACC 8.2%

Terex'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 Terex:

cost_of_equity (12.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.42) + 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.