THERMAX.NS WACC - Weighted Average Cost of Capital

The WACC of Thermax Limited (THERMAX.NS) is 14.5%.

The Cost of Equity of Thermax Limited (THERMAX.NS) is 14.85%.

The Cost of Debt of Thermax Limited (THERMAX.NS) is 8.40%.

	Range	Selected
Cost of equity	13.70% - 16.00%	14.85%
Tax rate	25.10% - 25.60%	25.35%
Cost of debt	8.10% - 8.70%	8.40%
WACC	13.4% - 15.6%	14.5%

WACC

THERMAX.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.82	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	16.00%

Tax rate	25.10%	25.60%
Debt/Equity ratio	0.05	0.05
Cost of debt	8.10%	8.70%

After-tax WACC	13.4%	15.6%


Selected WACC	14.5%

THERMAX.NS'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 THERMAX.NS:

cost_of_equity (14.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.