NTO.AX
Nitro Software Ltd
Price:  
2.19 
AUD
Volume:  
54,246
Australia | Software

NTO.AX WACC - Weighted Average Cost of Capital

The WACC of Nitro Software Ltd (NTO.AX) is 9.7%.

The Cost of Equity of Nitro Software Ltd (NTO.AX) is 9.75%.
The Cost of Debt of Nitro Software Ltd (NTO.AX) is 7.55%.

RangeSelected
Cost of equity7.9% - 11.6%9.75%
Tax rate2.9% - 3.0%2.95%
Cost of debt7.0% - 8.1%7.55%
WACC7.9% - 11.5%9.7%
WACC

NTO.AX WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium5.1%6.1%
Adjusted beta0.751.07
Additional risk adjustments0.0%0.5%
Cost of equity7.9%11.6%
Tax rate2.9%3.0%
Debt/Equity ratio
0.010.01
Cost of debt7.0%8.1%
After-tax WACC7.9%11.5%
Selected WACC9.7%

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.