TOPS
Top Ships Inc
Price:  
6.08 
USD
Volume:  
23,767
Greece | Oil, Gas & Consumable Fuels

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 8.3%.
The Cost of Debt of Top Ships Inc (TOPS) is 10%.

RangeSelected
Cost of equity6.3% - 10.3%8.3%
Tax rate26.2% - 27.0%26.6%
Cost of debt7.6% - 12.4%10%
WACC5.7% - 9.2%7.4%
WACC

TOPS WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.530.97
Additional risk adjustments0.0%0.5%
Cost of equity6.3%10.3%
Tax rate26.2%27.0%
Debt/Equity ratio
8.648.64
Cost of debt7.6%12.4%
After-tax WACC5.7%9.2%
Selected WACC7.4%

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 (8.30%) = 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.