The WACC of Nice Ltd (NICE.TA) is 10.0%.
| Range | Selected | |
| Cost of equity | 14.30% - 18.20% | 16.25% |
| Tax rate | 20.70% - 24.20% | 22.45% |
| Cost of debt | 4.00% - 5.40% | 4.70% |
| WACC | 8.7% - 11.2% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 4.8% | 5.3% |
| Equity market risk premium | 5.6% | 6.6% |
| Adjusted beta | 1.69 | 1.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.30% | 18.20% |
| Tax rate | 20.70% | 24.20% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.00% | 5.40% |
| After-tax WACC | 8.7% | 11.2% |
| Selected WACC | 10.0% | |
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 NICE.TA:
cost_of_equity (16.25%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (1.69) + 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.