HES
Hess Corp
Price:  
138.54 
USD
Volume:  
1,448,814.00
United States | Oil, Gas & Consumable Fuels
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Hess WACC - Weighted Average Cost of Capital

The WACC of Hess Corp (HES) is 7.8%.

The Cost of Equity of Hess Corp (HES) is 8.70%.
The Cost of Debt of Hess Corp (HES) is 4.95%.

Range Selected
Cost of equity 7.60% - 9.80% 8.70%
Tax rate 28.80% - 30.20% 29.50%
Cost of debt 4.60% - 5.30% 4.95%
WACC 6.9% - 8.8% 7.8%
WACC

Hess WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.82 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 9.80%
Tax rate 28.80% 30.20%
Debt/Equity ratio 0.2 0.2
Cost of debt 4.60% 5.30%
After-tax WACC 6.9% 8.8%
Selected WACC 7.8%

Hess'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 Hess:

cost_of_equity (8.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.82) + 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.