MWA WACC - Weighted Average Cost of Capital
The WACC of Mueller Water Products Inc (MWA) is 8.9%.
| Range | Selected | |
| Cost of equity | 8.2% - 10.9% | 9.55% |
| Tax rate | 23.0% - 24.4% | 23.7% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.7% - 10.2% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.94 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 10.9% |
| Tax rate | 23.0% | 24.4% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.7% | 10.2% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MWA | Mueller Water Products Inc | 0.12 | 1.18 | 1.09 |
| AIN | Albany International Corp | 0.16 | 1.12 | 1 |
| ATA.TO | ATS Automation Tooling Systems Inc | 0.27 | 1.53 | 1.27 |
| B | Barnes Group Inc | 0.53 | 0.8 | 0.57 |
| CMCO | Columbus McKinnon Corp | 1.13 | 1.02 | 0.55 |
| ESE | ESCO Technologies Inc | 0.03 | 0.94 | 0.92 |
| NPO | EnPro Industries Inc | 0.17 | 1.32 | 1.16 |
| TNC | Tennant Co | 0.15 | 0.8 | 0.72 |
| TRS | TriMas Corp | 0.39 | 0.84 | 0.65 |
| WBT | Welbilt Inc | 0.4 | 1.9 | 1.45 |
| Low | High | |
| Unlevered beta | 0.84 | 1.03 |
| Relevered beta | 0.91 | 1.13 |
| Adjusted relevered beta | 0.94 | 1.09 |
MWA'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 MWA:
cost_of_equity (9.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.94) + 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.