NX WACC - Weighted Average Cost of Capital

The WACC of Quanex Building Products Corp (NX) is 8.0%.

The Cost of Equity of Quanex Building Products Corp (NX) is 10.50%.

The Cost of Debt of Quanex Building Products Corp (NX) is 7.65%.

	Range	Selected
Cost of equity	9.20% - 11.80%	10.50%
Tax rate	20.70% - 37.90%	29.30%
Cost of debt	5.30% - 10.00%	7.65%
WACC	6.9% - 9.2%	8.0%

WACC

NX WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.17	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.80%

Tax rate	20.70%	37.90%
Debt/Equity ratio	0.89	0.89
Cost of debt	5.30%	10.00%

After-tax WACC	6.9%	9.2%


Selected WACC	8.0%

NX'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 NX:

cost_of_equity (10.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.17) + 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.