Can someone please help me determine Tesla's WACC. I am having trouble trying to find some of the necessary info to solve the formula. Thanks in advance for the help!!
Thanks for the help
What Figures did you use to determine WACC?
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets.
The WACC is the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere. Companies raise money from a number of sources: common equity, preferred stock, straight debt, convertible debt, exchangeable debt, warrants, options, pension liabilities, executive stock options, governmental subsidies, and so on. Different securities, which represent different sources of finance, are expected to generate different returns. The WACC is calculated taking into account the relative weights of each component of the capital structure. The more complex the company's capital structure, the more laborious it is to calculate the WACC.
I need Tesla's WACC for 2011, 2012, and 2013. Would you please provide me with these numbers? Thank you.
This is a fan comment site, not an official TM one. Contact Tesla by email if you need info.
My apologies. I asked because I saw the same question posted here by someone else. Thank you.
usually pure equity would be 13%, and a reasonable debt to equity of 40% would drop WACC to about 10%. you can go lower with more debt but default risk rises rapidly.
however as a startup there is more risk and shareholder may expect a bigger premium... so its hard to guess what Tesla might use as WACC in their ROIC calculations.
I was looking for the WACC and numbers used to determine WACC for 2011, 2012 and 2013, since I'm doing Tesla's valuation for a mock acquisition. Is the 10% mentioned in entry from Feb.4, the most accurate information available?
Some of my research has given me some of the following data:
enterprise value of $20.02 bill.
FCF yield of -2.49%
stock intrinsic value -$3, or 0 since it is negative
Other areas are not available, due to amount of historic data available.
Tesla's current growth is very exciting, and will continue to follow.
Looking for Tesla's WACC for 20012 and 2013,or figures to calculate. Thank you.
2013 WACC for TSLA is 5.15% based on a beta of 0.5 and cost of equity of 5.20% and market risk premium of 3.6%. Since WACC and cost of equity are almost identical this says that TSLA does not carry much debt.
@kmiske | AUGUST 19, 2014
"2013 WACC for TSLA is 5.15% based on a beta of 0.5 and cost of equity of 5.20% and market risk premium of 3.6%."
Yahoo Finance lists TSLA with a beta of 1.41 as of today.
How does this affect the WACC?