TYL
Tyler Technologies Inc
Price:  
576.90 
USD
Volume:  
182,454.00
United States | Software
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TYL WACC - Weighted Average Cost of Capital

The WACC of Tyler Technologies Inc (TYL) is 7.8%.

The Cost of Equity of Tyler Technologies Inc (TYL) is 7.85%.
The Cost of Debt of Tyler Technologies Inc (TYL) is 4.50%.

Range Selected
Cost of equity 6.60% - 9.10% 7.85%
Tax rate 12.00% - 13.30% 12.65%
Cost of debt 4.50% - 4.50% 4.50%
WACC 6.5% - 9.0% 7.8%
WACC

TYL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.59 0.76
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 9.10%
Tax rate 12.00% 13.30%
Debt/Equity ratio 0.02 0.02
Cost of debt 4.50% 4.50%
After-tax WACC 6.5% 9.0%
Selected WACC 7.8%

TYL'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 TYL:

cost_of_equity (7.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.