GWRS
Global Water Resources Inc
Price:  
9.86 
USD
Volume:  
25,375.00
United States | Water Utilities
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GWRS WACC - Weighted Average Cost of Capital

The WACC of Global Water Resources Inc (GWRS) is 6.9%.

The Cost of Equity of Global Water Resources Inc (GWRS) is 7.80%.
The Cost of Debt of Global Water Resources Inc (GWRS) is 6.70%.

Range Selected
Cost of equity 6.90% - 8.70% 7.80%
Tax rate 25.50% - 26.40% 25.95%
Cost of debt 5.90% - 7.50% 6.70%
WACC 6.1% - 7.7% 6.9%
WACC

GWRS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.66 0.68
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 8.70%
Tax rate 25.50% 26.40%
Debt/Equity ratio 0.45 0.45
Cost of debt 5.90% 7.50%
After-tax WACC 6.1% 7.7%
Selected WACC 6.9%

GWRS'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 GWRS:

cost_of_equity (7.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.66) + 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.