OGS
ONE Gas Inc
Price:  
73.65 
USD
Volume:  
567,445.00
United States | Gas Utilities
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

OGS WACC - Weighted Average Cost of Capital

The WACC of ONE Gas Inc (OGS) is 5.8%.

The Cost of Equity of ONE Gas Inc (OGS) is 7.00%.
The Cost of Debt of ONE Gas Inc (OGS) is 5.05%.

Range Selected
Cost of equity 6.10% - 7.90% 7.00%
Tax rate 15.80% - 16.70% 16.25%
Cost of debt 4.00% - 6.10% 5.05%
WACC 4.9% - 6.7% 5.8%
WACC

OGS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.49 0.55
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 7.90%
Tax rate 15.80% 16.70%
Debt/Equity ratio 0.77 0.77
Cost of debt 4.00% 6.10%
After-tax WACC 4.9% 6.7%
Selected WACC 5.8%

OGS'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 OGS:

cost_of_equity (7.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.49) + 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.