GULFOILLUB.NS
Gulf Oil Lubricants India Ltd
Price:  
1,241 
INR
Volume:  
188,124
India | Chemicals

GULFOILLUB.NS WACC - Weighted Average Cost of Capital

The WACC of Gulf Oil Lubricants India Ltd (GULFOILLUB.NS) is 17.2%.

The Cost of Equity of Gulf Oil Lubricants India Ltd (GULFOILLUB.NS) is 17.85%.
The Cost of Debt of Gulf Oil Lubricants India Ltd (GULFOILLUB.NS) is 7.95%.

RangeSelected
Cost of equity16.4% - 19.3%17.85%
Tax rate25.5% - 25.6%25.55%
Cost of debt7.5% - 8.4%7.95%
WACC15.8% - 18.6%17.2%
WACC

GULFOILLUB.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta1.151.23
Additional risk adjustments0.0%0.5%
Cost of equity16.4%19.3%
Tax rate25.5%25.6%
Debt/Equity ratio
0.060.06
Cost of debt7.5%8.4%
After-tax WACC15.8%18.6%
Selected WACC17.2%

GULFOILLUB.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 GULFOILLUB.NS:

cost_of_equity (17.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.15) + 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.