Question 1

What is Northern Oil and Gas, Inc.'s WACC?

Accepted Answer

Northern Oil and Gas, Inc. (NOG) has a Weighted Average Cost of Capital (WACC) of 7.63%. This is calculated using a Cost of Equity of 8.71% (via CAPM with a beta of 1.00) and a pre-tax Cost of Debt of 6.71%, with an equity weight of 45.97% in the capital structure.

Question 2

Is Northern Oil and Gas, Inc.'s WACC high or low?

Accepted Answer

Northern Oil and Gas, Inc.'s WACC of 7.63% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is Northern Oil and Gas, Inc.'s WACC calculated?

Accepted Answer

Northern Oil and Gas, Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.71% is derived from the CAPM model using a beta of 1.00. The pre-tax Cost of Debt (Rd) is 6.71%. The capital structure is 45.97% equity and 54.03% debt.

Northern Oil and Gas, Inc. (NOG) — WACC 分析

WACC 构成

解读

Northern Oil and Gas, Inc.（NOG）WACC：7.63%

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Northern Oil and Gas, Inc.（NOG） WACC 解读

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