NMM WACC - Weighted Average Cost of Capital
The WACC of Navios Maritime Partners LP (NMM) is 7.4%.
| Range | Selected | |
| Cost of equity | 10.0% - 13.3% | 11.65% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 6.1% - 7.8% | 6.95% |
| WACC | 6.4% - 8.4% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.33 | 1.51 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 13.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.86 | 1.86 |
| Cost of debt | 6.1% | 7.8% |
| After-tax WACC | 6.4% | 8.4% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NMM | Navios Maritime Partners LP | 1.86 | 1.3 | 0.55 |
| CKH | SEACOR Holdings Inc | 0.36 | 0.97 | 0.76 |
| DSX | Diana Shipping Inc | 3.85 | 0.89 | 0.23 |
| EGLE | Eagle Bulk Shipping Inc | 0.64 | 1.09 | 0.74 |
| ESEA | Euroseas Ltd | 0.77 | 1.08 | 0.69 |
| GNK | Genco Shipping & Trading Ltd | 0.14 | 1.1 | 0.99 |
| GOGL | Golden Ocean Group Ltd | 0.95 | 1.53 | 0.9 |
| GRIN | Grindrod Shipping Holdings Ltd | 0.76 | 0 | 0 |
| NETI | Eneti Inc | 0.15 | 0.98 | 0.88 |
| SB | Safe Bulkers Inc | 1.39 | 1.07 | 0.53 |
| Low | High | |
| Unlevered beta | 0.63 | 0.75 |
| Relevered beta | 1.49 | 1.76 |
| Adjusted relevered beta | 1.33 | 1.51 |
NMM'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 NMM:
cost_of_equity (11.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.33) + 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.