TFG.AS WACC - Weighted Average Cost of Capital

The WACC of Tetragon Financial Group Ltd (TFG.AS) is 7.8%.

The Cost of Equity of Tetragon Financial Group Ltd (TFG.AS) is 8.20%.

The Cost of Debt of Tetragon Financial Group Ltd (TFG.AS) is 8.75%.

	Range	Selected
Cost of equity	6.50% - 9.90%	8.20%
Tax rate	25.00% - 25.30%	25.15%
Cost of debt	4.00% - 13.50%	8.75%
WACC	5.6% - 9.9%	7.8%

WACC

TFG.AS WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.86	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.90%

Tax rate	25.00%	25.30%
Debt/Equity ratio	0.34	0.34
Cost of debt	4.00%	13.50%

After-tax WACC	5.6%	9.9%


Selected WACC	7.8%

TFG.AS'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 TFG.AS:

cost_of_equity (8.20%) = risk_free_rate (2.85%) + equity_risk_premium (5.10%) * adjusted_beta (0.86) + 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.