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Northrop Grumman Corp. (NOC) — WACC Analysis

WACC Breakdown

Northrop Grumman Corp. (NOC) has a weighted average cost of capital (WACC) of 6.2%. The cost of equity is 6.7%, derived from a beta of 0.20 and a risk-free rate of 4.7%. The after-tax cost of debt is 3.4%. The capital structure is 83.6% equity and 16.4% debt.

Interpretation

A WACC of 6.2% suggests that the market views Northrop Grumman Corp. as relatively low-risk, with a lower cost of financing.

Investors can compare NOC's WACC of 6.2% against industry peers to gauge its relative financing costs. A beta of 0.20 reflects the stock's volatility relative to the broader market.

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VALUATION

NOC WACC: 6.17% for Northrop Grumman Corp.

Current inputs imply a 6.70% cost of equity and a 4.34% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Northrop Grumman Corp. Common Stock (NOC) WACC Results
Weighted Average Cost of Capital
6.17%
Cost of Equity
6.70%
Risk-Free Rate4.73%
Beta0.20
Market Risk Premium4.23%
Cost of Debt
3.43%
Pre-Tax Cost of Debt4.34%
Tax Rate21.00%
Tax Shield0.91%
Capital Structure
Equity: 83.61%($77.51B)
Debt: 16.39%($15.19B)
Equity Component
5.61%
83.61% × 6.70%
Debt Component
0.56%
16.39% × 3.43%

Northrop Grumman Corp. (NOC) WACC in context

Northrop Grumman Corp. (NOC) currently screens with an estimated WACC of 6.17%. That blends a 6.70% cost of equity, a 4.34% pre-tax cost of debt, and a 83.61% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What NOC WACC implies

A 6.17% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates NOC

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.20 and equity accounts for 83.61% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.