TMX WACC - Weighted Average Cost of Capital
The WACC of Terminix Global Holdings Inc (TMX) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.7% - 9.1% | 7.9% |
| Tax rate | 28.4% - 30.2% | 29.3% |
| Cost of debt | 4.7% - 5.1% | 4.9% |
| WACC | 6.1% - 8.2% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.61 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 9.1% |
| Tax rate | 28.4% | 30.2% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 4.7% | 5.1% |
| After-tax WACC | 6.1% | 8.2% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TMX | Terminix Global Holdings Inc | 0.2 | 0.78 | 0.68 |
| CSV | Carriage Services Inc | 0.75 | 0.5 | 0.33 |
| FRG | Franchise Group Inc | 1.74 | 1.95 | 0.87 |
| HRB | H & R Block Inc | 0.2 | 0.12 | 0.1 |
| PLC.TO | Park Lawn Corp | 0.26 | 0.45 | 0.38 |
| RGS | Regis Corp | 1.77 | 0.79 | 0.35 |
| SCI | Service Corporation International | 0.42 | 0.43 | 0.33 |
| SIC | Select Interior Concepts Inc | 0.45 | 0.94 | 0.72 |
| VVNT | Vivint Smart Home Inc | 1.05 | 0.85 | 0.48 |
| XX.V | Avante Logixx Inc | 0.06 | 1.57 | 1.5 |
| Low | High | |
| Unlevered beta | 0.37 | 0.56 |
| Relevered beta | 0.42 | 0.64 |
| Adjusted relevered beta | 0.61 | 0.76 |
TMX'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 TMX:
cost_of_equity (7.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.61) + 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.