NTNX
Nutanix Inc
Price:  
74.42 
USD
Volume:  
2,696,597.00
United States | Software
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Nutanix WACC - Weighted Average Cost of Capital

The WACC of Nutanix Inc (NTNX) is 8.2%.

The Cost of Equity of Nutanix Inc (NTNX) is 8.30%.
The Cost of Debt of Nutanix Inc (NTNX) is 5.00%.

Range Selected
Cost of equity 7.20% - 9.40% 8.30%
Tax rate 2.30% - 5.10% 3.70%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.1% - 9.3% 8.2%
WACC

Nutanix WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.72 0.82
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 9.40%
Tax rate 2.30% 5.10%
Debt/Equity ratio 0.03 0.03
Cost of debt 5.00% 5.00%
After-tax WACC 7.1% 9.3%
Selected WACC 8.2%

Nutanix'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 Nutanix:

cost_of_equity (8.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.