KNOP
Knot Offshore Partners LP
Price:  
7.46 
USD
Volume:  
332,731
United Kingdom | Oil, Gas & Consumable Fuels

KNOP WACC - Weighted Average Cost of Capital

The WACC of Knot Offshore Partners LP (KNOP) is 8.6%.

The Cost of Equity of Knot Offshore Partners LP (KNOP) is 10.9%.
The Cost of Debt of Knot Offshore Partners LP (KNOP) is 8.2%.

RangeSelected
Cost of equity8.3% - 13.5%10.9%
Tax rate1.3% - 2.6%1.95%
Cost of debt4.0% - 12.4%8.2%
WACC4.9% - 12.4%8.6%
WACC

KNOP WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.971.54
Additional risk adjustments0.0%0.5%
Cost of equity8.3%13.5%
Tax rate1.3%2.6%
Debt/Equity ratio
3.823.82
Cost of debt4.0%12.4%
After-tax WACC4.9%12.4%
Selected WACC8.6%

KNOP'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 KNOP:

cost_of_equity (10.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.97) + 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.