NWPX
Northwest Pipe Co
Price:  
40.80 
USD
Volume:  
66,828.00
United States | Construction & Engineering
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NWPX WACC - Weighted Average Cost of Capital

The WACC of Northwest Pipe Co (NWPX) is 6.8%.

The Cost of Equity of Northwest Pipe Co (NWPX) is 7.15%.
The Cost of Debt of Northwest Pipe Co (NWPX) is 4.75%.

Range Selected
Cost of equity 6.20% - 8.10% 7.15%
Tax rate 24.30% - 25.10% 24.70%
Cost of debt 4.70% - 4.80% 4.75%
WACC 5.9% - 7.6% 6.8%
WACC

NWPX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.51 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 8.10%
Tax rate 24.30% 25.10%
Debt/Equity ratio 0.12 0.12
Cost of debt 4.70% 4.80%
After-tax WACC 5.9% 7.6%
Selected WACC 6.8%

NWPX'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 NWPX:

cost_of_equity (7.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.51) + 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.