WTS
Watts Water Technologies Inc
Price:  
235.00 
USD
Volume:  
602,802.00
United States | Machinery
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WTS WACC - Weighted Average Cost of Capital

The WACC of Watts Water Technologies Inc (WTS) is 9.5%.

The Cost of Equity of Watts Water Technologies Inc (WTS) is 9.70%.
The Cost of Debt of Watts Water Technologies Inc (WTS) is 4.35%.

Range Selected
Cost of equity 8.10% - 11.30% 9.70%
Tax rate 24.80% - 26.70% 25.75%
Cost of debt 4.20% - 4.50% 4.35%
WACC 7.9% - 11.1% 9.5%
WACC

WTS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.91 1.15
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 11.30%
Tax rate 24.80% 26.70%
Debt/Equity ratio 0.03 0.03
Cost of debt 4.20% 4.50%
After-tax WACC 7.9% 11.1%
Selected WACC 9.5%

WTS'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 WTS:

cost_of_equity (9.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.91) + 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.