TRE.MC
Tecnicas Reunidas SA
Price:  
17.99 
EUR
Volume:  
115,876
Spain | Energy Equipment & Services

TRE.MC WACC - Weighted Average Cost of Capital

The WACC of Tecnicas Reunidas SA (TRE.MC) is 7.9%.

The Cost of Equity of Tecnicas Reunidas SA (TRE.MC) is 10.95%.
The Cost of Debt of Tecnicas Reunidas SA (TRE.MC) is 4.7%.

RangeSelected
Cost of equity9.5% - 12.4%10.95%
Tax rate37.1% - 40.1%38.6%
Cost of debt4.1% - 5.3%4.7%
WACC6.9% - 8.9%7.9%
WACC

TRE.MC WACC calculation

CategoryLowHigh
Long-term bond rate3.1%3.6%
Equity market risk premium7.4%8.4%
Adjusted beta0.860.98
Additional risk adjustments0.0%0.5%
Cost of equity9.5%12.4%
Tax rate37.1%40.1%
Debt/Equity ratio
0.620.62
Cost of debt4.1%5.3%
After-tax WACC6.9%8.9%
Selected WACC7.9%

TRE.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 TRE.MC:

cost_of_equity (10.95%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.86) + 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.