RES WACC - Weighted Average Cost of Capital
The WACC of RPC Inc (RES) is 8.4%.
| Range | Selected | |
| Cost of equity | 6.6% - 10.2% | 8.4% |
| Tax rate | 24.3% - 27.3% | 25.8% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.6% - 10.2% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.59 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 10.2% |
| Tax rate | 24.3% | 27.3% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.6% | 10.2% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RES | RPC Inc | 0 | 1.25 | 1.25 |
| CELP | Cypress Environmental Partners LP | 2.54 | 1.06 | 0.36 |
| CLB | Core Laboratories NV | 0.21 | 1.21 | 1.04 |
| HLX | Helix Energy Solutions Group Inc | 0.32 | 1.08 | 0.87 |
| LNDT | Liandi Clean Technology Inc | 2613.16 | -0.17 | 0 |
| PUMP | ProPetro Holding Corp | 0.11 | 1.47 | 1.36 |
| SLCA | U.S. Silica Holdings Inc | 0.69 | 0.47 | 0.31 |
| USAC | USA Compression Partners LP | 0.86 | 0.65 | 0.39 |
| WEII.V | Wolverine Energy and Infrastructure Inc | 21.41 | 0.69 | 0.04 |
| WTTR | Select Energy Services Inc | 0.07 | 1.44 | 1.36 |
| Low | High | |
| Unlevered beta | 0.38 | 0.94 |
| Relevered beta | 0.39 | 0.94 |
| Adjusted relevered beta | 0.59 | 0.96 |
RES'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 RES:
cost_of_equity (8.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.