WOW
WideOpenWest Inc
Price:  
4.34 
USD
Volume:  
229,502.00
United States | Media
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WOW WACC - Weighted Average Cost of Capital

The WACC of WideOpenWest Inc (WOW) is 10.0%.

The Cost of Equity of WideOpenWest Inc (WOW) is 6.75%.
The Cost of Debt of WideOpenWest Inc (WOW) is 15.15%.

Range Selected
Cost of equity 5.70% - 7.80% 6.75%
Tax rate 23.80% - 26.40% 25.10%
Cost of debt 6.40% - 23.90% 15.15%
WACC 5.1% - 14.9% 10.0%
WACC

WOW WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.4 0.52
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.70% 7.80%
Tax rate 23.80% 26.40%
Debt/Equity ratio 2.68 2.68
Cost of debt 6.40% 23.90%
After-tax WACC 5.1% 14.9%
Selected WACC 10.0%

WOW'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 WOW:

cost_of_equity (6.75%) = 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.