APP
Applovin Corp
Price:  
307.58 
USD
Volume:  
7,017,294.00
United States | Software
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APP WACC - Weighted Average Cost of Capital

The WACC of Applovin Corp (APP) is 9.3%.

The Cost of Equity of Applovin Corp (APP) is 9.40%.
The Cost of Debt of Applovin Corp (APP) is 5.65%.

Range Selected
Cost of equity 8.10% - 10.70% 9.40%
Tax rate 6.10% - 6.70% 6.40%
Cost of debt 4.90% - 6.40% 5.65%
WACC 8.0% - 10.5% 9.3%
WACC

APP WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.93 1.04
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 10.70%
Tax rate 6.10% 6.70%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.90% 6.40%
After-tax WACC 8.0% 10.5%
Selected WACC 9.3%

APP'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 APP:

cost_of_equity (9.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.93) + 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.