PXD
Pioneer Natural Resources Co
Price:  
269.62 
USD
Volume:  
5,926,110.00
United States | Oil, Gas & Consumable Fuels
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

PXD WACC - Weighted Average Cost of Capital

The WACC of Pioneer Natural Resources Co (PXD) is 8.3%.

The Cost of Equity of Pioneer Natural Resources Co (PXD) is 8.65%.
The Cost of Debt of Pioneer Natural Resources Co (PXD) is 4.25%.

Range Selected
Cost of equity 7.60% - 9.70% 8.65%
Tax rate 22.40% - 23.00% 22.70%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.3% - 9.3% 8.3%
WACC

PXD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.81 0.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 9.70%
Tax rate 22.40% 23.00%
Debt/Equity ratio 0.08 0.08
Cost of debt 4.00% 4.50%
After-tax WACC 7.3% 9.3%
Selected WACC 8.3%

PXD'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 PXD:

cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.81) + 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.