TWM.TO WACC - Weighted Average Cost of Capital

The WACC of Tidewater Midstream and Infrastructure Ltd (TWM.TO) is 10.1%.

The Cost of Equity of Tidewater Midstream and Infrastructure Ltd (TWM.TO) is 7.80%.

The Cost of Debt of Tidewater Midstream and Infrastructure Ltd (TWM.TO) is 13.45%.

	Range	Selected
Cost of equity	6.40% - 9.20%	7.80%
Tax rate	17.50% - 21.90%	19.70%
Cost of debt	6.70% - 20.20%	13.45%
WACC	5.7% - 14.6%	10.1%

WACC

TWM.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.63	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	9.20%

Tax rate	17.50%	21.90%
Debt/Equity ratio	4.83	4.83
Cost of debt	6.70%	20.20%

After-tax WACC	5.7%	14.6%


Selected WACC	10.1%

TWM.TO'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 TWM.TO:

cost_of_equity (7.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.63) + 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.