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%.

	Range	Selected
Cost of equity	16.40% - 19.30%	17.85%
Tax rate	25.50% - 25.60%	25.55%
Cost of debt	7.50% - 8.40%	7.95%
WACC	15.8% - 18.6%	17.2%

WACC

GULFOILLUB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.15	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.40%	19.30%

Tax rate	25.50%	25.60%
Debt/Equity ratio	0.06	0.06
Cost of debt	7.50%	8.40%

After-tax WACC	15.8%	18.6%


Selected WACC	17.2%

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.