TPG
TPG Inc
Price:  
53.09 
USD
Volume:  
5,534,042.00
United States | Capital Markets
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TPG WACC - Weighted Average Cost of Capital

The WACC of TPG Inc (TPG) is 9.5%.

The Cost of Equity of TPG Inc (TPG) is 9.80%.
The Cost of Debt of TPG Inc (TPG) is 6.35%.

Range Selected
Cost of equity 8.40% - 11.20% 9.80%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.70% - 7.00% 6.35%
WACC 8.2% - 10.8% 9.5%
WACC

TPG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.99 1.12
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 11.20%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.06 0.06
Cost of debt 5.70% 7.00%
After-tax WACC 8.2% 10.8%
Selected WACC 9.5%

TPG'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 TPG:

cost_of_equity (9.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.99) + 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.