OFSS.NS WACC - Weighted Average Cost of Capital
The WACC of Oracle Financial Services Software Ltd (OFSS.NS) is 18.5%.
| Range | Selected | |
| Cost of equity | 17.1% - 19.9% | 18.5% |
| Tax rate | 27.5% - 28.4% | 27.95% |
| Cost of debt | 4.4% - 7.5% | 5.95% |
| WACC | 17.1% - 19.9% | 18.5% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.23 | 1.29 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 17.1% | 19.9% |
| Tax rate | 27.5% | 28.4% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.4% | 7.5% |
| After-tax WACC | 17.1% | 19.9% |
| Selected WACC | 18.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OFSS.NS | Oracle Financial Services Software Ltd | 0 | 1.21 | 1.2 |
| 000997.SZ | Newland Digital Technology Co Ltd | 0.04 | 1.46 | 1.42 |
| 002153.SZ | Beijing Shiji Information Technology Co Ltd | 0 | 1.56 | 1.56 |
| 300271.SZ | Beijing Thunisoft Co Ltd | 0.01 | 1.37 | 1.36 |
| 533056.BO | Vedavaag Systems Ltd | 0.03 | 1.33 | 1.31 |
| NUCLEUS.NS | Nucleus Software Exports Ltd | 0 | 1.79 | 1.79 |
| ONMOBILE.NS | Onmobile Global Ltd | 0.03 | 1.5 | 1.47 |
| SASKEN.NS | Sasken Technologies Ltd | 0 | 0.88 | 0.88 |
| SUBEXLTD.NS | Subex Ltd | 0.04 | 1.89 | 1.84 |
| ZENSARTECH.NS | Zensar Technologies Ltd | 0.01 | 1.02 | 1.01 |
| Low | High | |
| Unlevered beta | 1.34 | 1.44 |
| Relevered beta | 1.34 | 1.43 |
| Adjusted relevered beta | 1.23 | 1.29 |
OFSS.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 OFSS.NS:
cost_of_equity (18.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.23) + 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.