NOVA
Sunnova Energy International Inc
Price:  
0.22 
USD
Volume:  
6,865,208
United States | Independent Power and Renewable Electricity Producers

NOVA WACC - Weighted Average Cost of Capital

The WACC of Sunnova Energy International Inc (NOVA) is 6.3%.

The Cost of Equity of Sunnova Energy International Inc (NOVA) is 105.75%.
The Cost of Debt of Sunnova Energy International Inc (NOVA) is 6%.

RangeSelected
Cost of equity67.9% - 143.6%105.75%
Tax rate0.2% - 1.4%0.8%
Cost of debt5.0% - 7.0%6%
WACC5.2% - 7.4%6.3%
WACC

NOVA WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta13.9124.78
Additional risk adjustments0.0%0.5%
Cost of equity67.9%143.6%
Tax rate0.2%1.4%
Debt/Equity ratio
306.1306.1
Cost of debt5.0%7.0%
After-tax WACC5.2%7.4%
Selected WACC6.3%

NOVA'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 NOVA:

cost_of_equity (105.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (13.91) + 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.