TROX WACC - Weighted Average Cost of Capital
The WACC of Tronox Holdings PLC (TROX) is 6.4%.
| Range | Selected | |
| Cost of equity | 8.6% - 13.5% | 11.05% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.9% - 9.1% | 7% |
| WACC | 4.6% - 8.1% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.03 | 1.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 13.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 3.81 | 3.81 |
| Cost of debt | 4.9% | 9.1% |
| After-tax WACC | 4.6% | 8.1% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TROX | Tronox Holdings PLC | 3.81 | 1.7 | 0.45 |
| ASIX | AdvanSix Inc | 0.32 | 1.18 | 0.96 |
| CBT | Cabot Corp | 0.28 | 0.78 | 0.65 |
| CHCC | China Chemical Corp | 2.04 | 0.26 | 0.11 |
| GLGI | Greystone Logistics Inc | 0.37 | 0.01 | 0.01 |
| GURE | Gulf Resources Inc | 0.18 | -0.63 | -0.55 |
| KOP | Koppers Holdings Inc | 1.53 | 1.09 | 0.52 |
| KRO | Kronos Worldwide Inc | 0.67 | 1.28 | 0.86 |
| OEC | Orion Engineered Carbons SA | 1.67 | 1 | 0.45 |
| PRH.V | Pearl River Holdings Ltd | 1.91 | -0.45 | -0.19 |
| Low | High | |
| Unlevered beta | 0.31 | 0.48 |
| Relevered beta | 1.04 | 1.81 |
| Adjusted relevered beta | 1.03 | 1.54 |
TROX'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 TROX:
cost_of_equity (11.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.03) + 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.