OC
Owens Corning
Price:  
136.44 
USD
Volume:  
1,036,119.00
United States | Building Products
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Owens WACC - Weighted Average Cost of Capital

The WACC of Owens Corning (OC) is 7.6%.

The Cost of Equity of Owens Corning (OC) is 9.40%.
The Cost of Debt of Owens Corning (OC) is 4.95%.

Range Selected
Cost of equity 8.20% - 10.60% 9.40%
Tax rate 24.80% - 27.10% 25.95%
Cost of debt 4.80% - 5.10% 4.95%
WACC 6.8% - 8.5% 7.6%
WACC

Owens WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.94 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 10.60%
Tax rate 24.80% 27.10%
Debt/Equity ratio 0.44 0.44
Cost of debt 4.80% 5.10%
After-tax WACC 6.8% 8.5%
Selected WACC 7.6%

Owens'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 Owens:

cost_of_equity (9.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.94) + 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.