GULFOILLUB.NS WACC - Weighted Average Cost of Capital

The WACC of Gulf Oil Lubricants India Ltd (GULFOILLUB.NS) is 15.4%.

The Cost of Equity of Gulf Oil Lubricants India Ltd (GULFOILLUB.NS) is 16.50%.

The Cost of Debt of Gulf Oil Lubricants India Ltd (GULFOILLUB.NS) is 7.25%.

	Range	Selected
Cost of equity	14.80% - 18.20%	16.50%
Tax rate	25.50% - 25.60%	25.55%
Cost of debt	7.00% - 7.50%	7.25%
WACC	13.8% - 17.0%	15.4%

WACC

GULFOILLUB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.95	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.80%	18.20%

Tax rate	25.50%	25.60%
Debt/Equity ratio	0.1	0.1
Cost of debt	7.00%	7.50%

After-tax WACC	13.8%	17.0%


Selected WACC	15.4%

GULFOILLUB.NS'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 GULFOILLUB.NS:

cost_of_equity (16.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * 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.