NFD.A.V WACC - Weighted Average Cost of Capital

The WACC of Northfield Capital Corp (NFD.A.V) is 7.4%.

The Cost of Equity of Northfield Capital Corp (NFD.A.V) is 7.80%.

The Cost of Debt of Northfield Capital Corp (NFD.A.V) is 5.50%.

	Range	Selected
Cost of equity	6.60% - 9.00%	7.80%
Tax rate	3.80% - 4.50%	4.15%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.2% - 8.7%	7.4%

WACC

NFD.A.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.53	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.00%

Tax rate	3.80%	4.50%
Debt/Equity ratio	0.16	0.16
Cost of debt	4.00%	7.00%

After-tax WACC	6.2%	8.7%


Selected WACC	7.4%

NFD.A.V'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 NFD.A.V:

cost_of_equity (7.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.53) + 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.