NPO WACC - Weighted Average Cost of Capital
The WACC of EnPro Industries Inc (NPO) is 8.5%.
| Range | Selected | |
| Cost of equity | 7.9% - 10.6% | 9.25% |
| Tax rate | 18.9% - 46.3% | 32.6% |
| Cost of debt | 4.3% - 5.3% | 4.8% |
| WACC | 7.4% - 9.6% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.88 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 10.6% |
| Tax rate | 18.9% | 46.3% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 4.3% | 5.3% |
| After-tax WACC | 7.4% | 9.6% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NPO | EnPro Industries Inc | 0.15 | 1.4 | 1.26 |
| ATA.TO | ATS Automation Tooling Systems Inc | 0.27 | 1.53 | 1.27 |
| B | Barnes Group Inc | 0.53 | 0.8 | 0.56 |
| CMCO | Columbus McKinnon Corp | 1 | 1.07 | 0.61 |
| MEC | Mayville Engineering Company Inc | 0.24 | 0.52 | 0.44 |
| MWA | Mueller Water Products Inc | 0.12 | 1.21 | 1.11 |
| SIS.TO | Savaria Corp | 0.21 | 0.95 | 0.82 |
| TNC | Tennant Co | 0.13 | 0.87 | 0.79 |
| TRS | TriMas Corp | 0.33 | 0.83 | 0.66 |
| WBT | Welbilt Inc | 0.4 | 1.9 | 1.45 |
| Low | High | |
| Unlevered beta | 0.74 | 0.93 |
| Relevered beta | 0.82 | 1.04 |
| Adjusted relevered beta | 0.88 | 1.03 |
NPO'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 NPO:
cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.88) + 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.