OCN.L WACC - Weighted Average Cost of Capital

The WACC of Ocean Wilsons Holdings Ltd (OCN.L) is 7.2%.

The Cost of Equity of Ocean Wilsons Holdings Ltd (OCN.L) is 10.10%.

The Cost of Debt of Ocean Wilsons Holdings Ltd (OCN.L) is 5.50%.

	Range	Selected
Cost of equity	9.00% - 11.20%	10.10%
Tax rate	25.70% - 29.90%	27.80%
Cost of debt	5.50% - 5.50%	5.50%
WACC	6.7% - 7.8%	7.2%

WACC

OCN.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	11.20%

Tax rate	25.70%	29.90%
Debt/Equity ratio	0.88	0.88
Cost of debt	5.50%	5.50%

After-tax WACC	6.7%	7.8%


Selected WACC	7.2%

OCN.L'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 OCN.L:

cost_of_equity (10.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.