TILE
Interface Inc
Price:  
20.01 
USD
Volume:  
477,298.00
United States | Commercial Services & Supplies
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TILE WACC - Weighted Average Cost of Capital

The WACC of Interface Inc (TILE) is 7.9%.

The Cost of Equity of Interface Inc (TILE) is 8.80%.
The Cost of Debt of Interface Inc (TILE) is 6.10%.

Range Selected
Cost of equity 7.30% - 10.30% 8.80%
Tax rate 23.80% - 26.40% 25.10%
Cost of debt 5.20% - 7.00% 6.10%
WACC 6.6% - 9.2% 7.9%
WACC

TILE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.75 0.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 10.30%
Tax rate 23.80% 26.40%
Debt/Equity ratio 0.27 0.27
Cost of debt 5.20% 7.00%
After-tax WACC 6.6% 9.2%
Selected WACC 7.9%

TILE'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 TILE:

cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.75) + 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.