NATH
Nathan's Famous Inc
Price:  
110.47 
USD
Volume:  
100,264.00
United States | Hotels, Restaurants & Leisure
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NATH WACC - Weighted Average Cost of Capital

The WACC of Nathan's Famous Inc (NATH) is 7.1%.

The Cost of Equity of Nathan's Famous Inc (NATH) is 7.30%.
The Cost of Debt of Nathan's Famous Inc (NATH) is 6.30%.

Range Selected
Cost of equity 6.10% - 8.50% 7.30%
Tax rate 26.80% - 27.40% 27.10%
Cost of debt 4.90% - 7.70% 6.30%
WACC 5.9% - 8.2% 7.1%
WACC

NATH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.49 0.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 8.50%
Tax rate 26.80% 27.40%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.90% 7.70%
After-tax WACC 5.9% 8.2%
Selected WACC 7.1%

NATH'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 NATH:

cost_of_equity (7.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.49) + 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.