TRN.MI
Terna Rete Elettrica Nazionale SpA
Price:  
8.66 
EUR
Volume:  
4,660,524.00
Italy | Electric Utilities
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TRN.MI WACC - Weighted Average Cost of Capital

The WACC of Terna Rete Elettrica Nazionale SpA (TRN.MI) is 7.2%.

The Cost of Equity of Terna Rete Elettrica Nazionale SpA (TRN.MI) is 10.05%.
The Cost of Debt of Terna Rete Elettrica Nazionale SpA (TRN.MI) is 4.35%.

Range Selected
Cost of equity 9.00% - 11.10% 10.05%
Tax rate 28.60% - 29.00% 28.80%
Cost of debt 4.00% - 4.70% 4.35%
WACC 6.5% - 8.0% 7.2%
WACC

TRN.MI WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.64 0.7
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.00% 11.10%
Tax rate 28.60% 29.00%
Debt/Equity ratio 0.69 0.69
Cost of debt 4.00% 4.70%
After-tax WACC 6.5% 8.0%
Selected WACC 7.2%

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 (10.05%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.