OIL.NS WACC - Weighted Average Cost of Capital

The WACC of Oil India Ltd (OIL.NS) is 12.4%.

The Cost of Equity of Oil India Ltd (OIL.NS) is 15.40%.

The Cost of Debt of Oil India Ltd (OIL.NS) is 5.95%.

	Range	Selected
Cost of equity	13.80% - 17.00%	15.40%
Tax rate	23.50% - 25.10%	24.30%
Cost of debt	4.30% - 7.60%	5.95%
WACC	10.9% - 13.9%	12.4%

WACC

OIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.83	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	17.00%

Tax rate	23.50%	25.10%
Debt/Equity ratio	0.38	0.38
Cost of debt	4.30%	7.60%

After-tax WACC	10.9%	13.9%


Selected WACC	12.4%

OIL.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 OIL.NS:

cost_of_equity (15.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * 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.