NBR
Nabors Industries Ltd
Price:  
42.36 
USD
Volume:  
697,574.00
Bermuda | Energy Equipment & Services
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NBR WACC - Weighted Average Cost of Capital

The WACC of Nabors Industries Ltd (NBR) is 7.7%.

The Cost of Equity of Nabors Industries Ltd (NBR) is 9.60%.
The Cost of Debt of Nabors Industries Ltd (NBR) is 10.90%.

Range Selected
Cost of equity 7.20% - 12.00% 9.60%
Tax rate 19.60% - 39.60% 29.60%
Cost of debt 6.20% - 15.60% 10.90%
WACC 5.5% - 10.0% 7.7%
WACC

NBR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.73 1.28
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 12.00%
Tax rate 19.60% 39.60%
Debt/Equity ratio 3.76 3.76
Cost of debt 6.20% 15.60%
After-tax WACC 5.5% 10.0%
Selected WACC 7.7%

NBR'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 NBR:

cost_of_equity (9.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.