Baron Oil PLC (BOIL.L) WACC Analysis

As of May 24, 2025, Baron Oil PLC (BOIL.L) carries a Weighted Average Cost of Capital (WACC) of 7.0%. WACC reflects the blended rate Baron Oil PLC must pay to both equity and debt holders.

Within that, the cost of equity is 6.0%, the cost of debt is 5.0%, and the effective tax rate is 19.0%.

Breakdown of WACC Components

• Long-term bond rate: 4.0% – 4.5%
• Equity market risk premium: 6.0% – 7.0%
• Adjusted beta: 0.33 – 0.43
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0

What It Means for Investors

With a selected WACC of 7.0%, Baron Oil PLC must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.