NAD WACC - Weighted Average Cost of Capital

The WACC of Nuveen Quality Municipal Income Fund (NAD) is 8.1%.

The Cost of Equity of Nuveen Quality Municipal Income Fund (NAD) is 7.75%.

The Cost of Debt of Nuveen Quality Municipal Income Fund (NAD) is 27.15%.

	Range	Selected
Cost of equity	6.90% - 8.60%	7.75%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	12.40% - 41.90%	27.15%
WACC	7.0% - 9.2%	8.1%

WACC

NAD WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.66	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	8.60%

Tax rate	26.20%	27.00%
Debt/Equity ratio	0.03	0.03
Cost of debt	12.40%	41.90%

After-tax WACC	7.0%	9.2%


Selected WACC	8.1%

NAD'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 NAD:

cost_of_equity (7.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.66) + 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.