Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.71	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.1%	9.1%

Tax rate	26.2%	27.0%
Debt/Equity ratio	0.55	0.55
Cost of debt	4.0%	7.0%

After-tax WACC	5.6%	7.7%


Selected WACC	6.7%

NNN WACC - Detailed calculations of Beta

		Debt/Equity		Unlevered
Peers	Company Name	ratio	Beta	beta

NNN	National Retail Properties Inc	0.55	0.14	0.1
ADC	Agree Realty Corp	0.34	0.01	0
BRX	Brixmor Property Group Inc	0.66	0.65	0.44
CHP.UN.TO	Choice Properties Real Estate Investment Trust	1.35	0.86	0.43
FRT	Federal Realty Investment Trust	0.53	0.51	0.36
KIM	Kimco Realty Corp	0.58	0.66	0.47
REG	Regency Centers Corp	0.33	0.34	0.27
REI.UN.TO	RioCan Real Estate Investment Trust	1.4	1.18	0.58
SRC	Spirit Realty Capital Inc	0.6	1.57	1.09
WRI	Weingarten Realty Investors	0.46	1.61	1.2

	Low	High

Unlevered beta	0.41	0.45
Relevered beta	0.57	0.63
Adjusted relevered beta	0.71	0.75

NNN'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 NNN:

cost_of_equity (8.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.71) + 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.