Northeast Bank (NBN) WACC Analysis

As of June 7, 2025, Northeast Bank (NBN) carries a Weighted Average Cost of Capital (WACC) of 6.7%. WACC reflects the blended rate Northeast Bank must pay to both equity and debt holders.

Within that, the cost of equity is 8.4%, the cost of debt is 5.0%, and the effective tax rate is 31.5%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: 0.98 – 1.17
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 1

What It Means for Investors

With a selected WACC of 6.7%, Northeast Bank must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.