TSLX
Sixth Street Specialty Lending Inc
Price:  
20.87 
USD
Volume:  
468,157.00
United States | Capital Markets
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TSLX WACC - Weighted Average Cost of Capital

The WACC of Sixth Street Specialty Lending Inc (TSLX) is 8.1%.

The Cost of Equity of Sixth Street Specialty Lending Inc (TSLX) is 8.95%.
The Cost of Debt of Sixth Street Specialty Lending Inc (TSLX) is 7.50%.

Range Selected
Cost of equity 6.90% - 11.00% 8.95%
Tax rate 2.20% - 3.00% 2.60%
Cost of debt 5.90% - 9.10% 7.50%
WACC 6.3% - 9.9% 8.1%
WACC

TSLX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.67 1.09
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 11.00%
Tax rate 2.20% 3.00%
Debt/Equity ratio 0.97 0.97
Cost of debt 5.90% 9.10%
After-tax WACC 6.3% 9.9%
Selected WACC 8.1%

TSLX'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 TSLX:

cost_of_equity (8.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.67) + 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.