NBS.L
Nationwide Building Society
Price:  
131.50 
GBP
Volume:  
250.00
United Kingdom | Thrifts & Mortgage Finance
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NBS.L WACC - Weighted Average Cost of Capital

The WACC of Nationwide Building Society (NBS.L) is 4.7%.

The Cost of Equity of Nationwide Building Society (NBS.L) is 149.45%.
The Cost of Debt of Nationwide Building Society (NBS.L) is 5.00%.

Range Selected
Cost of equity 25.00% - 273.90% 149.45%
Tax rate 22.90% - 24.20% 23.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 4.0% - 5.5% 4.7%
WACC

NBS.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 3.51 38.52
Additional risk adjustments 0.0% 0.5%
Cost of equity 25.00% 273.90%
Tax rate 22.90% 24.20%
Debt/Equity ratio 159.65 159.65
Cost of debt 5.00% 5.00%
After-tax WACC 4.0% 5.5%
Selected WACC 4.7%

NBS.L'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 NBS.L:

cost_of_equity (149.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (3.51) + 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.