THO
Thor Industries Inc
Price:  
83.66 
USD
Volume:  
686,248.00
United States | Automobiles
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THO WACC - Weighted Average Cost of Capital

The WACC of Thor Industries Inc (THO) is 7.4%.

The Cost of Equity of Thor Industries Inc (THO) is 8.30%.
The Cost of Debt of Thor Industries Inc (THO) is 5.25%.

Range Selected
Cost of equity 6.80% - 9.80% 8.30%
Tax rate 21.90% - 22.80% 22.35%
Cost of debt 5.20% - 5.30% 5.25%
WACC 6.2% - 8.6% 7.4%
WACC

THO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.63 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 9.80%
Tax rate 21.90% 22.80%
Debt/Equity ratio 0.28 0.28
Cost of debt 5.20% 5.30%
After-tax WACC 6.2% 8.6%
Selected WACC 7.4%

THO'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 THO:

cost_of_equity (8.30%) = 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.