TRN.MI
Terna Rete Elettrica Nazionale SpA
Price:  
8.49 
EUR
Volume:  
2,207,694
Italy | Electric Utilities

TRN.MI WACC - Weighted Average Cost of Capital

The WACC of Terna Rete Elettrica Nazionale SpA (TRN.MI) is 6.9%.

The Cost of Equity of Terna Rete Elettrica Nazionale SpA (TRN.MI) is 10%.
The Cost of Debt of Terna Rete Elettrica Nazionale SpA (TRN.MI) is 4.35%.

RangeSelected
Cost of equity8.6% - 11.4%10%
Tax rate28.6% - 29.0%28.8%
Cost of debt4.0% - 4.7%4.35%
WACC6.0% - 7.8%6.9%
WACC

TRN.MI WACC calculation

CategoryLowHigh
Long-term bond rate3.7%4.2%
Equity market risk premium8.3%9.3%
Adjusted beta0.590.72
Additional risk adjustments0.0%0.5%
Cost of equity8.6%11.4%
Tax rate28.6%29.0%
Debt/Equity ratio
0.810.81
Cost of debt4.0%4.7%
After-tax WACC6.0%7.8%
Selected WACC6.9%

TRN.MI WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.250.37
Relevered beta0.390.58
Adjusted relevered beta0.590.72

TRN.MI'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 TRN.MI:

cost_of_equity (10.00%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.