COP
ConocoPhillips
Price:  
84.58 
USD
Volume:  
6,784,841
United States | Oil, Gas & Consumable Fuels

ConocoPhillips WACC - Weighted Average Cost of Capital

The WACC of ConocoPhillips (COP) is 7.6%.

The Cost of Equity of ConocoPhillips (COP) is 8.6%.
The Cost of Debt of ConocoPhillips (COP) is 4.6%.

RangeSelected
Cost of equity7.6% - 9.6%8.6%
Tax rate32.6% - 33.2%32.9%
Cost of debt4.5% - 4.7%4.6%
WACC6.8% - 8.4%7.6%
WACC

ConocoPhillips WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.810.84
Additional risk adjustments0.0%0.5%
Cost of equity7.6%9.6%
Tax rate32.6%33.2%
Debt/Equity ratio
0.230.23
Cost of debt4.5%4.7%
After-tax WACC6.8%8.4%
Selected WACC7.6%

ConocoPhillips'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 ConocoPhillips:

cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.81) + 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.