CWCO WACC - Weighted Average Cost of Capital
The WACC of Consolidated Water Co Ltd (CWCO) is 6.7%.
| Range | Selected | |
| Cost of equity | 5.7% - 7.7% | 6.7% |
| Tax rate | 8.1% - 11.4% | 9.75% |
| Cost of debt | 4.8% - 7.0% | 5.9% |
| WACC | 5.7% - 7.7% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.4 | 0.5 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 7.7% |
| Tax rate | 8.1% | 11.4% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.8% | 7.0% |
| After-tax WACC | 5.7% | 7.7% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CWCO | Consolidated Water Co Ltd | 0 | 0.51 | 0.51 |
| ALAN | Alanco Technologies Inc | 0.09 | 1.59 | 1.48 |
| ARTNA | Artesian Resources Corp | 0.5 | 0.3 | 0.2 |
| AWR | American States Water Co | 0.31 | 0.07 | 0.06 |
| CDZI | Cadiz Inc | 0.24 | 1.02 | 0.84 |
| CWT | California Water Service Group | 0.49 | 0.13 | 0.09 |
| GWRS | Global Water Resources Inc | 0.44 | 0.66 | 0.47 |
| MSEX | Middlesex Water Co | 0.37 | -0.17 | -0.13 |
| SJW | SJW Group | 0.98 | 0.13 | 0.07 |
| YORW | York Water Co | 0.44 | 0.14 | 0.1 |
| Low | High | |
| Unlevered beta | 0.1 | 0.31 |
| Relevered beta | 0.1 | 0.25 |
| Adjusted relevered beta | 0.4 | 0.5 |
CWCO'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 CWCO:
cost_of_equity (6.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.4) + 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.