OKE
ONEOK Inc
Price:  
84.73 
USD
Volume:  
2,319,991.00
United States | Oil, Gas & Consumable Fuels
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ONEOK WACC - Weighted Average Cost of Capital

The WACC of ONEOK Inc (OKE) is 6.4%.

The Cost of Equity of ONEOK Inc (OKE) is 8.00%.
The Cost of Debt of ONEOK Inc (OKE) is 5.05%.

Range Selected
Cost of equity 6.80% - 9.20% 8.00%
Tax rate 23.90% - 24.10% 24.00%
Cost of debt 5.00% - 5.10% 5.05%
WACC 5.7% - 7.2% 6.4%
WACC

ONEOK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.64 0.77
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 9.20%
Tax rate 23.90% 24.10%
Debt/Equity ratio 0.6 0.6
Cost of debt 5.00% 5.10%
After-tax WACC 5.7% 7.2%
Selected WACC 6.4%

ONEOK'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 ONEOK:

cost_of_equity (8.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.