TX
Ternium SA
Price:  
31.12 
USD
Volume:  
154,063.00
Luxembourg | Metals & Mining
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TX WACC - Weighted Average Cost of Capital

The WACC of Ternium SA (TX) is 8.6%.

The Cost of Equity of Ternium SA (TX) is 10.25%.
The Cost of Debt of Ternium SA (TX) is 5.90%.

Range Selected
Cost of equity 8.70% - 11.80% 10.25%
Tax rate 24.80% - 25.20% 25.00%
Cost of debt 5.70% - 6.10% 5.90%
WACC 7.5% - 9.8% 8.6%
WACC

TX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.06 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 11.80%
Tax rate 24.80% 25.20%
Debt/Equity ratio 0.4 0.4
Cost of debt 5.70% 6.10%
After-tax WACC 7.5% 9.8%
Selected WACC 8.6%

TX'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 TX:

cost_of_equity (10.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.06) + 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.