NBB
Nuveen Taxable Municipal Income Fund
Price:  
15.47 
USD
Volume:  
50,865.00
United States | N/A
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NBB WACC - Weighted Average Cost of Capital

The WACC of Nuveen Taxable Municipal Income Fund (NBB) is 7.7%.

The Cost of Equity of Nuveen Taxable Municipal Income Fund (NBB) is 9.45%.
The Cost of Debt of Nuveen Taxable Municipal Income Fund (NBB) is 5.50%.

Range Selected
Cost of equity 7.60% - 11.30% 9.45%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.1% - 9.2% 7.7%
WACC

NBB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.82 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 11.30%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.49 0.49
Cost of debt 4.00% 7.00%
After-tax WACC 6.1% 9.2%
Selected WACC 7.7%

NBB'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 NBB:

cost_of_equity (9.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.82) + 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.