The WACC of Thor Industries Inc (THO) is 7.3%.
Range | Selected | |
Cost of equity | 6.8% - 9.6% | 8.2% |
Tax rate | 21.9% - 22.8% | 22.35% |
Cost of debt | 5.2% - 5.3% | 5.25% |
WACC | 6.2% - 8.4% | 7.3% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.63 | 0.85 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.8% | 9.6% |
Tax rate | 21.9% | 22.8% |
Debt/Equity ratio | 0.3 | 0.3 |
Cost of debt | 5.2% | 5.3% |
After-tax WACC | 6.2% | 8.4% |
Selected WACC | 7.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
THO | Thor Industries Inc | 0.3 | 0.94 | 0.76 |
ELCR | Electric Car Company Inc | 87.26 | 0 | 0 |
F | Ford Motor Co | 3.82 | 0.67 | 0.17 |
FSR | Fisker Inc | 9.59 | 0.95 | 0.11 |
GM | General Motors Co | 2.83 | 0.79 | 0.25 |
LI | Li Auto Inc. | 0.01 | 0.91 | 0.9 |
TSLA | Tesla Inc | 0.01 | 1.89 | 1.88 |
WGO | Winnebago Industries Inc | 0.74 | 0.7 | 0.45 |
XPEV | Xpeng Inc | 0.16 | 0.7 | 0.62 |
FROTO.IS | Ford Otomotiv Sanayi AS | 0.13 | 0.7 | 0.64 |
Low | High | |
Unlevered beta | 0.37 | 0.63 |
Relevered beta | 0.45 | 0.78 |
Adjusted relevered beta | 0.63 | 0.85 |
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 THO:
cost_of_equity (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.