NOV
Nov Inc
Price:  
12.42 
USD
Volume:  
4,366,660.00
United States | Energy Equipment & Services
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NOV WACC - Weighted Average Cost of Capital

The WACC of Nov Inc (NOV) is 8.4%.

The Cost of Equity of Nov Inc (NOV) is 10.60%.
The Cost of Debt of Nov Inc (NOV) is 4.30%.

Range Selected
Cost of equity 9.20% - 12.00% 10.60%
Tax rate 16.80% - 28.10% 22.45%
Cost of debt 4.00% - 4.60% 4.30%
WACC 7.4% - 9.3% 8.4%
WACC

NOV WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.16 1.27
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 12.00%
Tax rate 16.80% 28.10%
Debt/Equity ratio 0.44 0.44
Cost of debt 4.00% 4.60%
After-tax WACC 7.4% 9.3%
Selected WACC 8.4%

NOV'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 NOV:

cost_of_equity (10.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.16) + 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.