ORCL
Oracle Corp
Price:  
163.85 
USD
Volume:  
8,075,180.00
United States | Software
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Oracle WACC - Weighted Average Cost of Capital

The WACC of Oracle Corp (ORCL) is 8.3%.

The Cost of Equity of Oracle Corp (ORCL) is 9.10%.
The Cost of Debt of Oracle Corp (ORCL) is 4.55%.

Range Selected
Cost of equity 7.00% - 11.20% 9.10%
Tax rate 9.20% - 11.40% 10.30%
Cost of debt 4.00% - 5.10% 4.55%
WACC 6.5% - 10.1% 8.3%
WACC

Oracle WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.69 1.13
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.00% 11.20%
Tax rate 9.20% 11.40%
Debt/Equity ratio 0.2 0.2
Cost of debt 4.00% 5.10%
After-tax WACC 6.5% 10.1%
Selected WACC 8.3%

Oracle'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 Oracle:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.69) + 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.