MSEX
Middlesex Water Co
Price:  
57.95 
USD
Volume:  
217,012.00
United States | Water Utilities
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MSEX WACC - Weighted Average Cost of Capital

The WACC of Middlesex Water Co (MSEX) is 6.1%.

The Cost of Equity of Middlesex Water Co (MSEX) is 6.90%.
The Cost of Debt of Middlesex Water Co (MSEX) is 4.30%.

Range Selected
Cost of equity 5.80% - 8.00% 6.90%
Tax rate 10.00% - 12.60% 11.30%
Cost of debt 4.00% - 4.60% 4.30%
WACC 5.2% - 6.9% 6.1%
WACC

MSEX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.42 0.56
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 8.00%
Tax rate 10.00% 12.60%
Debt/Equity ratio 0.37 0.37
Cost of debt 4.00% 4.60%
After-tax WACC 5.2% 6.9%
Selected WACC 6.1%

MSEX'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 MSEX:

cost_of_equity (6.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.42) + 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.