NLSN
Nielsen Holdings PLC
Price:  
27.98 
USD
Volume:  
22,307,500.00
United States | Professional Services
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Nielsen WACC - Weighted Average Cost of Capital

The WACC of Nielsen Holdings PLC (NLSN) is 7.2%.

The Cost of Equity of Nielsen Holdings PLC (NLSN) is 9.20%.
The Cost of Debt of Nielsen Holdings PLC (NLSN) is 5.10%.

Range Selected
Cost of equity 7.90% - 10.50% 9.20%
Tax rate 22.70% - 36.30% 29.50%
Cost of debt 4.10% - 6.10% 5.10%
WACC 6.2% - 8.1% 7.2%
WACC

Nielsen WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.89 1
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.50%
Tax rate 22.70% 36.30%
Debt/Equity ratio 0.56 0.56
Cost of debt 4.10% 6.10%
After-tax WACC 6.2% 8.1%
Selected WACC 7.2%

Nielsen'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 Nielsen:

cost_of_equity (9.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.89) + 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.