NWPX
Northwest Pipe Co
Price:  
42.78 
USD
Volume:  
28,272.00
United States | Construction & Engineering
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NWPX WACC - Weighted Average Cost of Capital

The WACC of Northwest Pipe Co (NWPX) is 9.4%.

The Cost of Equity of Northwest Pipe Co (NWPX) is 10.05%.
The Cost of Debt of Northwest Pipe Co (NWPX) is 4.75%.

Range Selected
Cost of equity 8.60% - 11.50% 10.05%
Tax rate 24.30% - 25.10% 24.70%
Cost of debt 4.70% - 4.80% 4.75%
WACC 8.1% - 10.7% 9.4%
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 1.02 1.18
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 11.50%
Tax rate 24.30% 25.10%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.70% 4.80%
After-tax WACC 8.1% 10.7%
Selected WACC 9.4%

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 (10.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.02) + 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.