TSE WACC - Weighted Average Cost of Capital

The WACC of Trinseo SA (TSE) is 6.8%.

The Cost of Equity of Trinseo SA (TSE) is 32.40%.

The Cost of Debt of Trinseo SA (TSE) is 6.70%.

	Range	Selected
Cost of equity	13.20% - 51.60%	32.40%
Tax rate	10.30% - 14.60%	12.45%
Cost of debt	6.40% - 7.00%	6.70%
WACC	6.0% - 7.6%	6.8%

WACC

TSE WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	2.02	8.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	51.60%

Tax rate	10.30%	14.60%
Debt/Equity ratio	27.49	27.49
Cost of debt	6.40%	7.00%

After-tax WACC	6.0%	7.6%


Selected WACC	6.8%

TSE'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 TSE:

cost_of_equity (32.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.02) + 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.