MSEX
Middlesex Water Co
Price:  
55.57 
USD
Volume:  
74,220
United States | Water Utilities

MSEX WACC - Weighted Average Cost of Capital

The WACC of Middlesex Water Co (MSEX) is 5.8%.

The Cost of Equity of Middlesex Water Co (MSEX) is 6.55%.
The Cost of Debt of Middlesex Water Co (MSEX) is 4.3%.

RangeSelected
Cost of equity5.7% - 7.4%6.55%
Tax rate10.0% - 12.6%11.3%
Cost of debt4.0% - 4.6%4.3%
WACC5.1% - 6.5%5.8%
WACC

MSEX WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.40.46
Additional risk adjustments0.0%0.5%
Cost of equity5.7%7.4%
Tax rate10.0%12.6%
Debt/Equity ratio
0.390.39
Cost of debt4.0%4.6%
After-tax WACC5.1%6.5%
Selected WACC5.8%

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 (6.55%) = 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.