YORW WACC - Weighted Average Cost of Capital
The WACC of York Water Co (YORW) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.8% - 8.0% | 6.9% |
| Tax rate | 5.8% - 6.2% | 6% |
| Cost of debt | 4.0% - 5.1% | 4.55% |
| WACC | 5.2% - 7.0% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.42 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 8.0% |
| Tax rate | 5.8% | 6.2% |
| Debt/Equity ratio | 0.44 | 0.44 |
| Cost of debt | 4.0% | 5.1% |
| After-tax WACC | 5.2% | 7.0% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| YORW | York Water Co | 0.44 | 0.15 | 0.11 |
| ALAN | Alanco Technologies Inc | 0.09 | 1.59 | 1.47 |
| ARTNA | Artesian Resources Corp | 0.51 | 0.29 | 0.19 |
| AWR | American States Water Co | 0.31 | 0.06 | 0.04 |
| CDZI | Cadiz Inc | 0.22 | -0.13 | -0.11 |
| CWCO | Consolidated Water Co Ltd | 0 | 0.54 | 0.54 |
| CWT | California Water Service Group | 0.51 | 0.11 | 0.07 |
| GWRS | Global Water Resources Inc | 0.44 | 0.65 | 0.46 |
| MSEX | Middlesex Water Co | 0.39 | 1.63 | 1.2 |
| SJW | SJW Group | 0.98 | 0.13 | 0.07 |
| Low | High | |
| Unlevered beta | 0.09 | 0.3 |
| Relevered beta | 0.13 | 0.36 |
| Adjusted relevered beta | 0.42 | 0.57 |
YORW'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 YORW:
cost_of_equity (6.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.42) + 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.