ODC
Oil-Dri Corporation of America
Price:  
59.68 
USD
Volume:  
119,860
United States | Household Products

ODC WACC - Weighted Average Cost of Capital

The WACC of Oil-Dri Corporation of America (ODC) is 6.0%.

The Cost of Equity of Oil-Dri Corporation of America (ODC) is 6.1%.
The Cost of Debt of Oil-Dri Corporation of America (ODC) is 4.7%.

RangeSelected
Cost of equity5.4% - 6.8%6.1%
Tax rate16.7% - 18.2%17.45%
Cost of debt4.5% - 4.9%4.7%
WACC5.3% - 6.6%6.0%
WACC

ODC WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.330.35
Additional risk adjustments0.0%0.5%
Cost of equity5.4%6.8%
Tax rate16.7%18.2%
Debt/Equity ratio
0.060.06
Cost of debt4.5%4.9%
After-tax WACC5.3%6.6%
Selected WACC6.0%

ODC'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 ODC:

cost_of_equity (6.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.