0.2(1.64%) Volume: 5,310,555 2:00PM EST| Market Cap : 9.58 B | Enterprise Value : 13.92 B | P/E (TTM) : 10.98 | P/B : 0.79 |
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As of today (2019-12-05), Marathon Oil's weighted average cost of capital is N/A. Marathon Oil's ROIC % is 6.09% (calculated using TTM income statement data). GuruFocus does not have beta for this company to calculate its cost of equity, therefore no WACC available.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
| Marathon Oil Quarterly Data | ||||||||||||||||||||
| Dec14 | Mar15 | Jun15 | Sep15 | Dec15 | Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | |
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22.17 | 13.21 | 10.81 | 11.16 | 11.48 |
* The bar in red indicates where Marathon Oil's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
| WACC | = | E | / | (E + D) | * | Cost of Equity | + | D | / | (E + D) | * | Cost of Debt | * | (1 - Tax Rate) |
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Marathon Oil's weighted average cost of capital is N/A. Marathon Oil's ROIC % is 6.09% (calculated using TTM income statement data). GuruFocus does not have beta for this company to calculate its cost of equity, therefore no WACC available.
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
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