NEE
Nextera Energy Inc
Price:  
84.53 
USD
Volume:  
9,150,524.00
United States | Electric Utilities
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NEE WACC - Weighted Average Cost of Capital

The WACC of Nextera Energy Inc (NEE) is 5.9%.

The Cost of Equity of Nextera Energy Inc (NEE) is 6.75%.
The Cost of Debt of Nextera Energy Inc (NEE) is 4.55%.

Range Selected
Cost of equity 5.80% - 7.70% 6.75%
Tax rate 8.80% - 12.10% 10.45%
Cost of debt 4.00% - 5.10% 4.55%
WACC 5.1% - 6.6% 5.9%
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 0.43 0.5
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 7.70%
Tax rate 8.80% 12.10%
Debt/Equity ratio 0.48 0.48
Cost of debt 4.00% 5.10%
After-tax WACC 5.1% 6.6%
Selected WACC 5.9%

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 (6.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.43) + 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.