LKOH.ME WACC - Weighted Average Cost of Capital

The WACC of NK Lukoil PAO (LKOH.ME) is 20.3%.

The Cost of Equity of NK Lukoil PAO (LKOH.ME) is 21.15%.

The Cost of Debt of NK Lukoil PAO (LKOH.ME) is 10.60%.

	Range	Selected
Cost of equity	20.00% - 22.30%	21.15%
Tax rate	19.50% - 23.60%	21.55%
Cost of debt	4.80% - 16.40%	10.60%
WACC	19.0% - 21.7%	20.3%

WACC

LKOH.ME WACC calculation

Category	Low	High

Long-term bond rate	15.8%	16.3%
Equity market risk premium	11.7%	12.7%
Adjusted beta	0.36	0.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.00%	22.30%

Tax rate	19.50%	23.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.80%	16.40%

After-tax WACC	19.0%	21.7%


Selected WACC	20.3%

LKOH.ME'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 LKOH.ME:

cost_of_equity (21.15%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.36) + 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.