TW
Tradeweb Markets Inc
Price:  
145.25 
USD
Volume:  
1,353,181.00
United States | Capital Markets
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Tradeweb WACC - Weighted Average Cost of Capital

The WACC of Tradeweb Markets Inc (TW) is 6.7%.

The Cost of Equity of Tradeweb Markets Inc (TW) is 9.95%.
The Cost of Debt of Tradeweb Markets Inc (TW) is 4.50%.

Range Selected
Cost of equity 8.40% - 11.50% 9.95%
Tax rate 22.20% - 23.80% 23.00%
Cost of debt 4.50% - 4.50% 4.50%
WACC 5.9% - 7.5% 6.7%
WACC

Tradeweb WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.99 1.18
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 11.50%
Tax rate 22.20% 23.80%
Debt/Equity ratio 1 1
Cost of debt 4.50% 4.50%
After-tax WACC 5.9% 7.5%
Selected WACC 6.7%

Tradeweb'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 Tradeweb:

cost_of_equity (9.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.99) + 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.