BPX.WA WACC - Weighted Average Cost of Capital

The WACC of BPX SA (BPX.WA) is 13.4%.

The Cost of Equity of BPX SA (BPX.WA) is 13.60%.

The Cost of Debt of BPX SA (BPX.WA) is 5.00%.

	Range	Selected
Cost of equity	12.40% - 14.80%	13.60%
Tax rate	20.90% - 29.60%	25.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	12.2% - 14.5%	13.4%

WACC

BPX.WA WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.93	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	14.80%

Tax rate	20.90%	29.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	5.00%	5.00%

After-tax WACC	12.2%	14.5%


Selected WACC	13.4%

BPX.WA'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 BPX.WA:

cost_of_equity (13.60%) = risk_free_rate (7.45%) + equity_risk_premium (6.10%) * adjusted_beta (0.93) + 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.