RBLX
Roblox Corp
Price:  
70.77 
USD
Volume:  
10,472,121.00
United States | Entertainment
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RBLX WACC - Weighted Average Cost of Capital

The WACC of Roblox Corp (RBLX) is 7.2%.

The Cost of Equity of Roblox Corp (RBLX) is 7.25%.
The Cost of Debt of Roblox Corp (RBLX) is 7.00%.

Range Selected
Cost of equity 5.60% - 8.90% 7.25%
Tax rate 0.30% - 0.40% 0.35%
Cost of debt 7.00% - 7.00% 7.00%
WACC 5.6% - 8.9% 7.2%
WACC

RBLX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.38 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 8.90%
Tax rate 0.30% 0.40%
Debt/Equity ratio 0.02 0.02
Cost of debt 7.00% 7.00%
After-tax WACC 5.6% 8.9%
Selected WACC 7.2%

RBLX'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 RBLX:

cost_of_equity (7.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.