WDS.AX WACC - Weighted Average Cost of Capital

The WACC of Woodside Energy Group Ltd (WDS.AX) is 8.2%.

The Cost of Equity of Woodside Energy Group Ltd (WDS.AX) is 10.50%.

The Cost of Debt of Woodside Energy Group Ltd (WDS.AX) is 4.30%.

	Range	Selected
Cost of equity	9.10% - 11.90%	10.50%
Tax rate	27.80% - 32.20%	30.00%
Cost of debt	4.00% - 4.60%	4.30%
WACC	7.2% - 9.2%	8.2%

WACC

WDS.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.99	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.90%

Tax rate	27.80%	32.20%
Debt/Equity ratio	0.44	0.44
Cost of debt	4.00%	4.60%

After-tax WACC	7.2%	9.2%


Selected WACC	8.2%

WDS.AX'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 WDS.AX:

cost_of_equity (10.50%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.99) + 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.