TOPS
Top Ships Inc
Price:  
5.34 
USD
Volume:  
23,877.00
Greece | Oil, Gas & Consumable Fuels
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TOPS WACC - Weighted Average Cost of Capital

The WACC of Top Ships Inc (TOPS) is 7.4%.

The Cost of Equity of Top Ships Inc (TOPS) is 8.45%.
The Cost of Debt of Top Ships Inc (TOPS) is 10.00%.

Range Selected
Cost of equity 6.30% - 10.60% 8.45%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 7.60% - 12.40% 10.00%
WACC 5.7% - 9.2% 7.4%
WACC

TOPS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.53 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 10.60%
Tax rate 26.20% 27.00%
Debt/Equity ratio 10.49 10.49
Cost of debt 7.60% 12.40%
After-tax WACC 5.7% 9.2%
Selected WACC 7.4%

TOPS'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 TOPS:

cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.53) + 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.