NTO.AX WACC - Weighted Average Cost of Capital
The WACC of Nitro Software Ltd (NTO.AX) is 9.7%.
| Range | Selected | |
| Cost of equity | 7.9% - 11.6% | 9.75% |
| Tax rate | 2.9% - 3.0% | 2.95% |
| Cost of debt | 7.0% - 8.1% | 7.55% |
| WACC | 7.9% - 11.5% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.75 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 11.6% |
| Tax rate | 2.9% | 3.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 7.0% | 8.1% |
| After-tax WACC | 7.9% | 11.5% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NTO.AX | Nitro Software Ltd | 0.01 | 3.55 | 3.52 |
| 3DP.AX | Pointerra Ltd | 0.01 | 0.78 | 0.77 |
| AND.AX | Ansarada Group Ltd | 0.02 | 0.42 | 0.41 |
| BTH.AX | Bigtincan Holdings Ltd | 0.02 | 1.41 | 1.39 |
| CL1.AX | Class Ltd | 0.09 | 1.28 | 1.18 |
| DTS.AX | Dragontail Systems Ltd | 0.1 | -0.95 | -0.87 |
| DUB.AX | Dubber Corp Ltd | 0.16 | 1.4 | 1.22 |
| IFM.AX | Infomedia Ltd | 0.02 | 1.07 | 1.05 |
| IOD.AX | Iodm Ltd | 0.01 | -0.54 | -0.54 |
| JAN.AX | Janison Education Group Ltd | 0.01 | 0.28 | 0.28 |
| RUL.AX | RPMGlobal Holdings Ltd | 0.01 | 1.28 | 1.27 |
| Low | High | |
| Unlevered beta | 0.77 | 1.18 |
| Relevered beta | 0.63 | 1.1 |
| Adjusted relevered beta | 0.75 | 1.07 |
NTO.AX'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 NTO.AX:
cost_of_equity (9.75%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.