NXGN
NextGen Healthcare Inc
Price:  
23.94 
USD
Volume:  
3,151,660.00
United States | Health Care Technology
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NXGN WACC - Weighted Average Cost of Capital

The WACC of NextGen Healthcare Inc (NXGN) is 7.7%.

The Cost of Equity of NextGen Healthcare Inc (NXGN) is 7.45%.
The Cost of Debt of NextGen Healthcare Inc (NXGN) is 12.40%.

Range Selected
Cost of equity 6.30% - 8.60% 7.45%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 12.40% - 12.40% 12.40%
WACC 6.7% - 8.6% 7.7%
WACC

NXGN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.52 0.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 8.60%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.17 0.17
Cost of debt 12.40% 12.40%
After-tax WACC 6.7% 8.6%
Selected WACC 7.7%

NXGN'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 NXGN:

cost_of_equity (7.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.52) + 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.