CABO
Cable One Inc
Price:  
161.48 
USD
Volume:  
108,906.00
United States | Media
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CABO WACC - Weighted Average Cost of Capital

The WACC of Cable One Inc (CABO) is 5.6%.

The Cost of Equity of Cable One Inc (CABO) is 11.80%.
The Cost of Debt of Cable One Inc (CABO) is 4.85%.

Range Selected
Cost of equity 8.10% - 15.50% 11.80%
Tax rate 16.10% - 18.70% 17.40%
Cost of debt 4.10% - 5.60% 4.85%
WACC 4.4% - 6.8% 5.6%
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 0.92 1.9
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 15.50%
Tax rate 16.10% 18.70%
Debt/Equity ratio 3.97 3.97
Cost of debt 4.10% 5.60%
After-tax WACC 4.4% 6.8%
Selected WACC 5.6%

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 (11.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.92) + 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.