SJW
SJW Group
Price:  
55.23 
USD
Volume:  
193,052.00
United States | Water Utilities
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SJW WACC - Weighted Average Cost of Capital

The WACC of SJW Group (SJW) is 5.8%.

The Cost of Equity of SJW Group (SJW) is 7.55%.
The Cost of Debt of SJW Group (SJW) is 4.55%.

Range Selected
Cost of equity 6.20% - 8.90% 7.55%
Tax rate 9.70% - 11.00% 10.35%
Cost of debt 4.00% - 5.10% 4.55%
WACC 4.9% - 6.7% 5.8%
WACC

SJW WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.5 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 8.90%
Tax rate 9.70% 11.00%
Debt/Equity ratio 0.97 0.97
Cost of debt 4.00% 5.10%
After-tax WACC 4.9% 6.7%
Selected WACC 5.8%

SJW'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 SJW:

cost_of_equity (7.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.5) + 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.