TMX
Terminix Global Holdings Inc
Price:  
37.87 
USD
Volume:  
28,522,400.00
United States | Diversified Consumer Services
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TMX WACC - Weighted Average Cost of Capital

The WACC of Terminix Global Holdings Inc (TMX) is 7.1%.

The Cost of Equity of Terminix Global Holdings Inc (TMX) is 7.85%.
The Cost of Debt of Terminix Global Holdings Inc (TMX) is 4.90%.

Range Selected
Cost of equity 6.60% - 9.10% 7.85%
Tax rate 28.40% - 30.20% 29.30%
Cost of debt 4.70% - 5.10% 4.90%
WACC 6.1% - 8.2% 7.1%
WACC

TMX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.59 0.76
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 9.10%
Tax rate 28.40% 30.20%
Debt/Equity ratio 0.2 0.2
Cost of debt 4.70% 5.10%
After-tax WACC 6.1% 8.2%
Selected WACC 7.1%

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 (7.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.