TR1.MC WACC - Weighted Average Cost of Capital
The WACC of Tier 1 Technology SA (TR1.MC) is 6.8%.
| Range | Selected | |
| Cost of equity | 5.9% - 7.9% | 6.9% |
| Tax rate | 14.9% - 16.7% | 15.8% |
| Cost of debt | 4.0% - 6.4% | 5.2% |
| WACC | 5.8% - 7.8% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.37 | 0.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 7.9% |
| Tax rate | 14.9% | 16.7% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.0% | 6.4% |
| After-tax WACC | 5.8% | 7.8% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TR1.MC | Tier 1 Technology SA | 0.02 | 0.01 | 0.01 |
| ABS.MI | Arterra Bioscience SpA | 0.01 | 1.05 | 1.04 |
| ALTXC.PA | Txcom SA | 0.01 | 0.1 | 0.1 |
| DEV.WA | Devoran SA | 0.1 | 0.49 | 0.45 |
| FOS.MI | Fos SpA | 0.34 | 0.29 | 0.22 |
| GIGA.MC | Gigas Hosting SA | 1.31 | -0.07 | -0.03 |
| M8H.DE | MBH Corporation PLC | 14.72 | -0.54 | -0.04 |
| MOBA.ST | MOBA Network publ AB | 1.6 | 0.34 | 0.15 |
| TRG.ST | Transcendent Group AB (publ) | 0.09 | 0.96 | 0.89 |
| YSFT.MI | Softec SpA | 2.21 | -0.08 | -0.03 |
| Low | High | |
| Unlevered beta | 0.06 | 0.18 |
| Relevered beta | 0.06 | 0.18 |
| Adjusted relevered beta | 0.37 | 0.45 |
TR1.MC'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 TR1.MC:
cost_of_equity (6.90%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.37) + 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.