OAL.NS
Oriental Aromatics Ltd
Price:  
363.00 
INR
Volume:  
6,738.00
India | Chemicals
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OAL.NS WACC - Weighted Average Cost of Capital

The WACC of Oriental Aromatics Ltd (OAL.NS) is 15.6%.

The Cost of Equity of Oriental Aromatics Ltd (OAL.NS) is 18.25%.
The Cost of Debt of Oriental Aromatics Ltd (OAL.NS) is 8.55%.

Range Selected
Cost of equity 16.10% - 20.40% 18.25%
Tax rate 28.10% - 28.80% 28.45%
Cost of debt 8.00% - 9.10% 8.55%
WACC 13.8% - 17.3% 15.6%
WACC

OAL.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.11 1.35
Additional risk adjustments 0.0% 0.5%
Cost of equity 16.10% 20.40%
Tax rate 28.10% 28.80%
Debt/Equity ratio 0.28 0.28
Cost of debt 8.00% 9.10%
After-tax WACC 13.8% 17.3%
Selected WACC 15.6%

OAL.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 OAL.NS:

cost_of_equity (18.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.11) + 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.