OEC
Orion Engineered Carbons SA
Price:  
9.28 
USD
Volume:  
886,662.00
Luxembourg | Chemicals
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OEC WACC - Weighted Average Cost of Capital

The WACC of Orion Engineered Carbons SA (OEC) is 5.8%.

The Cost of Equity of Orion Engineered Carbons SA (OEC) is 9.60%.
The Cost of Debt of Orion Engineered Carbons SA (OEC) is 5.55%.

Range Selected
Cost of equity 6.60% - 12.60% 9.60%
Tax rate 30.00% - 31.90% 30.95%
Cost of debt 4.10% - 7.00% 5.55%
WACC 4.1% - 7.5% 5.8%
WACC

OEC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.59 1.39
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 12.60%
Tax rate 30.00% 31.90%
Debt/Equity ratio 1.9 1.9
Cost of debt 4.10% 7.00%
After-tax WACC 4.1% 7.5%
Selected WACC 5.8%

OEC'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 OEC:

cost_of_equity (9.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.