OXY
Occidental Petroleum Corp
Price:  
47.36 
USD
Volume:  
8,426,797.00
United States | Oil, Gas & Consumable Fuels
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OXY WACC - Weighted Average Cost of Capital

The WACC of Occidental Petroleum Corp (OXY) is 7.6%.

The Cost of Equity of Occidental Petroleum Corp (OXY) is 9.50%.
The Cost of Debt of Occidental Petroleum Corp (OXY) is 5.45%.

Range Selected
Cost of equity 8.20% - 10.80% 9.50%
Tax rate 20.30% - 25.60% 22.95%
Cost of debt 5.30% - 5.60% 5.45%
WACC 6.8% - 8.4% 7.6%
WACC

OXY WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.95 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 10.80%
Tax rate 20.30% 25.60%
Debt/Equity ratio 0.58 0.58
Cost of debt 5.30% 5.60%
After-tax WACC 6.8% 8.4%
Selected WACC 7.6%

OXY'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 OXY:

cost_of_equity (9.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.95) + 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.