WOW
WideOpenWest Inc
Price:  
3.78 
USD
Volume:  
518,798
United States | Media

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 6.5%.
The Cost of Debt of WideOpenWest Inc (WOW) is 15.15%.

RangeSelected
Cost of equity5.7% - 7.3%6.5%
Tax rate23.8% - 26.4%25.1%
Cost of debt6.4% - 23.9%15.15%
WACC5.1% - 15.0%10.0%
WACC

WOW WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.40.43
Additional risk adjustments0.0%0.5%
Cost of equity5.7%7.3%
Tax rate23.8%26.4%
Debt/Equity ratio
3.013.01
Cost of debt6.4%23.9%
After-tax WACC5.1%15.0%
Selected WACC10.0%

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 (6.50%) = 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.