NRC WACC - Weighted Average Cost of Capital

The WACC of National Research Corp (NRC) is 9.3%.

The Cost of Equity of National Research Corp (NRC) is 10.50%.

The Cost of Debt of National Research Corp (NRC) is 4.75%.

	Range	Selected
Cost of equity	8.60% - 12.40%	10.50%
Tax rate	22.80% - 23.50%	23.15%
Cost of debt	4.50% - 5.00%	4.75%
WACC	7.7% - 10.9%	9.3%

WACC

NRC WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.03	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	12.40%

Tax rate	22.80%	23.50%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.50%	5.00%

After-tax WACC	7.7%	10.9%


Selected WACC	9.3%

NRC'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 NRC:

cost_of_equity (10.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.03) + 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.