TIG
Trean Insurance Group Inc
Price:  
6.16 
USD
Volume:  
6,238,820.00
United States | Insurance
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TIG WACC - Weighted Average Cost of Capital

The WACC of Trean Insurance Group Inc (TIG) is 7.2%.

The Cost of Equity of Trean Insurance Group Inc (TIG) is 7.95%.
The Cost of Debt of Trean Insurance Group Inc (TIG) is 5.00%.

Range Selected
Cost of equity 7.00% - 8.90% 7.95%
Tax rate 15.10% - 20.60% 17.85%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.4% - 7.9% 7.2%
WACC

TIG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.67 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.00% 8.90%
Tax rate 15.10% 20.60%
Debt/Equity ratio 0.24 0.24
Cost of debt 5.00% 5.00%
After-tax WACC 6.4% 7.9%
Selected WACC 7.2%

TIG'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 TIG:

cost_of_equity (7.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.67) + 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.