OKEA.OL WACC - Weighted Average Cost of Capital
The WACC of Okea ASA (OKEA.OL) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.3% - 7.6% | 6.45% |
| Tax rate | 22.0% - 22.0% | 22% |
| Cost of debt | 6.6% - 7.0% | 6.8% |
| WACC | 5.3% - 7.3% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.39 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 7.6% |
| Tax rate | 22.0% | 22.0% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 6.6% | 7.0% |
| After-tax WACC | 5.3% | 7.3% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OKEA.OL | Okea ASA | 0.16 | 1.55 | 1.38 |
| ENW.L | Enwell Energy PLC | 0 | -0.46 | -0.46 |
| GKP.L | Gulf Keystone Petroleum Ltd | 0 | 1.91 | 1.91 |
| HUR.L | Hurricane Energy PLC | 0.08 | 1.9 | 1.79 |
| INDI.L | Indus Gas Ltd | 61.34 | 0.76 | 0.02 |
| NOG.L | Nostrum Oil & Gas PLC | 60.65 | -0.2 | 0 |
| PGR.L | Phoenix Global Resources PLC | 1.74 | 0.48 | 0.2 |
| PHAR.L | Pharos Energy PLC | 0 | 0.38 | 0.38 |
| SAVE.L | Savannah Energy PLC | 3.91 | 0.5 | 0.12 |
| WEN.L | Wentworth Resources PLC | 0 | -0.09 | -0.09 |
| Low | High | |
| Unlevered beta | 0.08 | 0.27 |
| Relevered beta | 0.09 | 0.31 |
| Adjusted relevered beta | 0.39 | 0.54 |
OKEA.OL'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 OKEA.OL:
cost_of_equity (6.45%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.39) + 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.