TPCS WACC - Weighted Average Cost of Capital
The WACC of TechPrecision Corp (TPCS) is 6.5%.
| Range | Selected | |
| Cost of equity | 5.4% - 8.4% | 6.9% |
| Tax rate | 24.7% - 29.5% | 27.1% |
| Cost of debt | 5.7% - 7.0% | 6.35% |
| WACC | 5.2% - 7.8% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 8.4% |
| Tax rate | 24.7% | 29.5% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 5.7% | 7.0% |
| After-tax WACC | 5.2% | 7.8% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TPCS | TechPrecision Corp | 0.21 | 1.13 | 0.97 |
| AGSO | AgriSolar Solutions Inc | 0.05 | 0.32 | 0.31 |
| BBRW | Brewbilt Manufacturing Inc | 869.78 | 0.04 | 0 |
| DDDX | 3DX Industries Inc | 2.6 | -0.29 | -0.1 |
| EVTN | Enviro Technologies US Inc | 0.1 | 0.68 | 0.64 |
| JKSM | Jacksam Corp | 3.93 | -1.04 | -0.26 |
| KNOS | Kronos Advanced Technologies Inc | 0.05 | 1.69 | 1.63 |
| OML.V | Omni Lite Industries Canada Inc | 0.39 | 0.68 | 0.52 |
| REKO.V | Reko International Group Inc | 0.54 | -0.32 | -0.23 |
| Low | High | |
| Unlevered beta | 0.06 | 0.48 |
| Relevered beta | 0 | 0.46 |
| Adjusted relevered beta | 0.33 | 0.64 |
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.