ORL.TA WACC - Weighted Average Cost of Capital

The WACC of Oil Refineries Ltd (ORL.TA) is 8.9%.

The Cost of Equity of Oil Refineries Ltd (ORL.TA) is 10.05%.

The Cost of Debt of Oil Refineries Ltd (ORL.TA) is 7.55%.

	Range	Selected
Cost of equity	9.00% - 11.10%	10.05%
Tax rate	15.80% - 16.90%	16.35%
Cost of debt	6.70% - 8.40%	7.55%
WACC	7.9% - 9.8%	8.9%

WACC

ORL.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.74	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	11.10%

Tax rate	15.80%	16.90%
Debt/Equity ratio	0.45	0.45
Cost of debt	6.70%	8.40%

After-tax WACC	7.9%	9.8%


Selected WACC	8.9%

ORL.TA'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 ORL.TA:

cost_of_equity (10.05%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (0.74) + 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.