TG
Tredegar Corp
Price:  
8.86 
USD
Volume:  
70,728.00
United States | Chemicals
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TG WACC - Weighted Average Cost of Capital

The WACC of Tredegar Corp (TG) is 8.0%.

The Cost of Equity of Tredegar Corp (TG) is 8.05%.
The Cost of Debt of Tredegar Corp (TG) is 11.15%.

Range Selected
Cost of equity 5.90% - 10.20% 8.05%
Tax rate 26.50% - 32.10% 29.30%
Cost of debt 6.70% - 15.60% 11.15%
WACC 5.8% - 10.2% 8.0%
WACC

TG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.45 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.90% 10.20%
Tax rate 26.50% 32.10%
Debt/Equity ratio 0.2 0.2
Cost of debt 6.70% 15.60%
After-tax WACC 5.8% 10.2%
Selected WACC 8.0%

TG'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 TG:

cost_of_equity (8.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.45) + 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.