TNC
Tennant Co
Price:  
71.48 
USD
Volume:  
199,215.00
United States | Machinery
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TNC WACC - Weighted Average Cost of Capital

The WACC of Tennant Co (TNC) is 9.1%.

The Cost of Equity of Tennant Co (TNC) is 9.85%.
The Cost of Debt of Tennant Co (TNC) is 4.80%.

Range Selected
Cost of equity 8.40% - 11.30% 9.85%
Tax rate 14.90% - 17.20% 16.05%
Cost of debt 4.80% - 4.80% 4.80%
WACC 7.9% - 10.4% 9.1%
WACC

TNC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.99 1.15
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 11.30%
Tax rate 14.90% 17.20%
Debt/Equity ratio 0.15 0.15
Cost of debt 4.80% 4.80%
After-tax WACC 7.9% 10.4%
Selected WACC 9.1%

TNC'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 TNC:

cost_of_equity (9.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.99) + 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.