CABO
Cable One Inc
Price:  
152.51 
USD
Volume:  
1,294,071.00
United States | Media
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CABO WACC - Weighted Average Cost of Capital

The WACC of Cable One Inc (CABO) is 6.7%.

The Cost of Equity of Cable One Inc (CABO) is 11.90%.
The Cost of Debt of Cable One Inc (CABO) is 6.60%.

Range Selected
Cost of equity 7.80% - 16.00% 11.90%
Tax rate 16.10% - 18.70% 17.40%
Cost of debt 4.10% - 9.10% 6.60%
WACC 4.3% - 9.0% 6.7%
WACC

CABO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.86 1.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 16.00%
Tax rate 16.10% 18.70%
Debt/Equity ratio 4.2 4.2
Cost of debt 4.10% 9.10%
After-tax WACC 4.3% 9.0%
Selected WACC 6.7%

CABO'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 CABO:

cost_of_equity (11.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.86) + 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.