REYN
Reynolds Consumer Products Inc
Price:  
23.16 
USD
Volume:  
604,196.00
United States | Household Products
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REYN WACC - Weighted Average Cost of Capital

The WACC of Reynolds Consumer Products Inc (REYN) is 5.5%.

The Cost of Equity of Reynolds Consumer Products Inc (REYN) is 6.15%.
The Cost of Debt of Reynolds Consumer Products Inc (REYN) is 4.55%.

Range Selected
Cost of equity 5.40% - 6.90% 6.15%
Tax rate 24.00% - 24.30% 24.15%
Cost of debt 4.00% - 5.10% 4.55%
WACC 4.8% - 6.1% 5.5%
WACC

REYN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.34 0.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 6.90%
Tax rate 24.00% 24.30%
Debt/Equity ratio 0.35 0.35
Cost of debt 4.00% 5.10%
After-tax WACC 4.8% 6.1%
Selected WACC 5.5%

REYN'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 REYN:

cost_of_equity (6.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.