TRG.MC
Tubos Reunidos SA
Price:  
0.56 
EUR
Volume:  
331,292.00
Spain | Metals & Mining
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TRG.MC WACC - Weighted Average Cost of Capital

The WACC of Tubos Reunidos SA (TRG.MC) is 8.1%.

The Cost of Equity of Tubos Reunidos SA (TRG.MC) is 22.20%.
The Cost of Debt of Tubos Reunidos SA (TRG.MC) is 5.00%.

Range Selected
Cost of equity 17.20% - 27.20% 22.20%
Tax rate 8.80% - 16.10% 12.45%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.0% 8.1%
WACC

TRG.MC WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 7.4% 8.4%
Adjusted beta 1.9 2.73
Additional risk adjustments 0.0% 0.5%
Cost of equity 17.20% 27.20%
Tax rate 8.80% 16.10%
Debt/Equity ratio 3.76 3.76
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.0%
Selected WACC 8.1%

TRG.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 TRG.MC:

cost_of_equity (22.20%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (1.9) + 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.