NCBS
Nicolet Bankshares Inc
Price:  
78.01 
USD
Volume:  
70,513.00
United States | Banks
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NCBS WACC - Weighted Average Cost of Capital

The WACC of Nicolet Bankshares Inc (NCBS) is 7.1%.

The Cost of Equity of Nicolet Bankshares Inc (NCBS) is 7.65%.
The Cost of Debt of Nicolet Bankshares Inc (NCBS) is 5.00%.

Range Selected
Cost of equity 6.60% - 8.70% 7.65%
Tax rate 24.90% - 25.30% 25.10%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.2% - 7.9% 7.1%
WACC

NCBS WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.82 0.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 8.70%
Tax rate 24.90% 25.30%
Debt/Equity ratio 0.18 0.18
Cost of debt 5.00% 5.00%
After-tax WACC 6.2% 7.9%
Selected WACC 7.1%

NCBS'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 NCBS:

cost_of_equity (7.65%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * 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.