NTAP
NetApp Inc
Price:  
92.33 
USD
Volume:  
1,528,425.00
United States | Technology Hardware, Storage & Peripherals
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NetApp WACC - Weighted Average Cost of Capital

The WACC of NetApp Inc (NTAP) is 9.4%.

The Cost of Equity of NetApp Inc (NTAP) is 10.25%.
The Cost of Debt of NetApp Inc (NTAP) is 4.25%.

Range Selected
Cost of equity 8.60% - 11.90% 10.25%
Tax rate 17.50% - 20.50% 19.00%
Cost of debt 4.00% - 4.50% 4.25%
WACC 8.0% - 10.9% 9.4%
WACC

NetApp 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 1.25
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 11.90%
Tax rate 17.50% 20.50%
Debt/Equity ratio 0.13 0.13
Cost of debt 4.00% 4.50%
After-tax WACC 8.0% 10.9%
Selected WACC 9.4%

NetApp'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 NetApp:

cost_of_equity (10.25%) = 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.