Question 1

What is American States Water Company's WACC?

Accepted Answer

American States Water Company (AWR) has a Weighted Average Cost of Capital (WACC) of 6.20%. This is calculated using a Cost of Equity of 6.61% (via CAPM with a beta of 0.32) and a pre-tax Cost of Debt of 5.89%, with an equity weight of 78.92% in the capital structure.

Question 2

Is American States Water Company's WACC high or low?

Accepted Answer

American States Water Company's WACC of 6.20% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is American States Water Company's WACC calculated?

Accepted Answer

American States Water Company's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 6.61% is derived from the CAPM model using a beta of 0.32. The pre-tax Cost of Debt (Rd) is 5.89%. The capital structure is 78.92% equity and 21.08% debt.

American States Water Company (AWR) — WACC 分析

WACC 构成

解读

American States Water Company（AWR）WACC：6.20%

WACC计算器

American States Water Company（AWR） WACC 解读

AWR 公司分析

AWR DCF 估值

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