TZPC WACC - Weighted Average Cost of Capital

The WACC of ThermaFreeze Products Corp (TZPC) is 11.9%.

The Cost of Equity of ThermaFreeze Products Corp (TZPC) is 21.15%.

The Cost of Debt of ThermaFreeze Products Corp (TZPC) is 15.90%.

	Range	Selected
Cost of equity	18.00% - 24.30%	21.15%
Tax rate	33.50% - 33.80%	33.65%
Cost of debt	7.90% - 23.90%	15.90%
WACC	7.0% - 16.9%	11.9%

WACC

TZPC WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	3.08	3.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.00%	24.30%

Tax rate	33.50%	33.80%
Debt/Equity ratio	6.54	6.54
Cost of debt	7.90%	23.90%

After-tax WACC	7.0%	16.9%


Selected WACC	11.9%

TZPC'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 TZPC:

cost_of_equity (21.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.08) + 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.