The WACC of TOR Minerals International Inc (TORM) is 7.3%.
Range | Selected | |
Cost of equity | 7.2% - 11.7% | 9.45% |
Tax rate | 18.1% - 20.0% | 19.05% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.5% - 9.1% | 7.3% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.73 | 1.22 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.2% | 11.7% |
Tax rate | 18.1% | 20.0% |
Debt/Equity ratio | 0.73 | 0.73 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.5% | 9.1% |
Selected WACC | 7.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TORM | TOR Minerals International Inc | 0.73 | 1.29 | 0.81 |
ABLT | American Biltrite Inc | 8.73 | 0.44 | 0.05 |
ADES | Advanced Emissions Solutions Inc | 0.04 | 0.6 | 0.58 |
BLGO | BioLargo Inc | 0.03 | -0.61 | -0.6 |
CBNT | C-Bond Systems Inc | 3.42 | 0.2 | 0.05 |
FSI | Flexible Solutions International Inc | 0.15 | 1.9 | 1.7 |
FTK | Flotek Industries Inc | 0.01 | 1.96 | 1.95 |
GGG.V | Graphene 3D Lab Inc(British Columbia) | 0.12 | -2.03 | -1.85 |
IKNX | Ikonics Corp | 0.04 | 0.99 | 0.96 |
NANX | Nanophase Technologies Corp | 0.09 | 0.92 | 0.86 |
Low | High | |
Unlevered beta | 0.37 | 0.83 |
Relevered beta | 0.6 | 1.33 |
Adjusted relevered beta | 0.73 | 1.22 |
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 TORM:
cost_of_equity (9.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.