NSSC
NAPCO Security Technologies Inc
Price:  
27.35 
USD
Volume:  
481,455.00
United States | Electronic Equipment, Instruments & Components
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NSSC WACC - Weighted Average Cost of Capital

The WACC of NAPCO Security Technologies Inc (NSSC) is 8.5%.

The Cost of Equity of NAPCO Security Technologies Inc (NSSC) is 13.20%.
The Cost of Debt of NAPCO Security Technologies Inc (NSSC) is 4.50%.

Range Selected
Cost of equity 10.70% - 15.70% 13.20%
Tax rate 12.50% - 13.50% 13.00%
Cost of debt 4.50% - 4.50% 4.50%
WACC 7.3% - 9.8% 8.5%
WACC

NSSC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.49 1.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.70% 15.70%
Tax rate 12.50% 13.50%
Debt/Equity ratio 1 1
Cost of debt 4.50% 4.50%
After-tax WACC 7.3% 9.8%
Selected WACC 8.5%

NSSC'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 NSSC:

cost_of_equity (13.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.49) + 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.