NEE
Nextera Energy Inc
Price:  
68.32 
USD
Volume:  
13,028,897.00
United States | Electric Utilities
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NEE WACC - Weighted Average Cost of Capital

The WACC of Nextera Energy Inc (NEE) is 5.5%.

The Cost of Equity of Nextera Energy Inc (NEE) is 6.45%.
The Cost of Debt of Nextera Energy Inc (NEE) is 4.45%.

Range Selected
Cost of equity 5.60% - 7.30% 6.45%
Tax rate 8.80% - 12.10% 10.45%
Cost of debt 4.00% - 4.90% 4.45%
WACC 4.8% - 6.2% 5.5%
WACC

NEE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.37 0.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 7.30%
Tax rate 8.80% 12.10%
Debt/Equity ratio 0.6 0.6
Cost of debt 4.00% 4.90%
After-tax WACC 4.8% 6.2%
Selected WACC 5.5%

NEE'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 NEE:

cost_of_equity (6.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.37) + 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.