TPCS
TechPrecision Corp
Price:  
3.97 
USD
Volume:  
36,849.00
United States | Machinery
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TPCS WACC - Weighted Average Cost of Capital

The WACC of TechPrecision Corp (TPCS) is 6.5%.

The Cost of Equity of TechPrecision Corp (TPCS) is 6.90%.
The Cost of Debt of TechPrecision Corp (TPCS) is 6.35%.

Range Selected
Cost of equity 5.40% - 8.40% 6.90%
Tax rate 24.70% - 29.50% 27.10%
Cost of debt 5.70% - 7.00% 6.35%
WACC 5.2% - 7.8% 6.5%
WACC

TPCS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.33 0.63
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 8.40%
Tax rate 24.70% 29.50%
Debt/Equity ratio 0.2 0.2
Cost of debt 5.70% 7.00%
After-tax WACC 5.2% 7.8%
Selected WACC 6.5%

TPCS'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 TPCS:

cost_of_equity (6.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.