OILCOUNTUB.NS WACC - Weighted Average Cost of Capital

The WACC of Oil Country Tubular Ltd (OILCOUNTUB.NS) is 11.6%.

The Cost of Equity of Oil Country Tubular Ltd (OILCOUNTUB.NS) is 11.95%.

The Cost of Debt of Oil Country Tubular Ltd (OILCOUNTUB.NS) is 7.85%.

	Range	Selected
Cost of equity	10.80% - 13.10%	11.95%
Tax rate	4.70% - 8.50%	6.60%
Cost of debt	7.00% - 8.70%	7.85%
WACC	10.4% - 12.7%	11.6%

WACC

OILCOUNTUB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	13.10%

Tax rate	4.70%	8.50%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.00%	8.70%

After-tax WACC	10.4%	12.7%


Selected WACC	11.6%

OILCOUNTUB.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 OILCOUNTUB.NS:

cost_of_equity (11.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.