BPCL.NS
Bharat Petroleum Corporation Ltd
Price:  
333.00 
INR
Volume:  
9,911,738.00
India | Oil, Gas & Consumable Fuels
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BPCL.NS WACC - Weighted Average Cost of Capital

The WACC of Bharat Petroleum Corporation Ltd (BPCL.NS) is 13.5%.

The Cost of Equity of Bharat Petroleum Corporation Ltd (BPCL.NS) is 16.85%.
The Cost of Debt of Bharat Petroleum Corporation Ltd (BPCL.NS) is 6.25%.

Range Selected
Cost of equity 15.00% - 18.70% 16.85%
Tax rate 25.30% - 26.10% 25.70%
Cost of debt 4.60% - 7.90% 6.25%
WACC 11.8% - 15.2% 13.5%
WACC

BPCL.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.97 1.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.00% 18.70%
Tax rate 25.30% 26.10%
Debt/Equity ratio 0.38 0.38
Cost of debt 4.60% 7.90%
After-tax WACC 11.8% 15.2%
Selected WACC 13.5%

BPCL.NS'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 BPCL.NS:

cost_of_equity (16.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.97) + 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.