RLGY
Realogy Holdings Corp
Price:  
12.08 
USD
Volume:  
1,141,740.00
United States | Real Estate Management & Development
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RLGY WACC - Weighted Average Cost of Capital

The WACC of Realogy Holdings Corp (RLGY) is 7.4%.

The Cost of Equity of Realogy Holdings Corp (RLGY) is 14.15%.
The Cost of Debt of Realogy Holdings Corp (RLGY) is 5.70%.

Range Selected
Cost of equity 12.20% - 16.10% 14.15%
Tax rate 22.00% - 27.20% 24.60%
Cost of debt 5.50% - 5.90% 5.70%
WACC 6.8% - 8.0% 7.4%
WACC

RLGY WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 2.14 2.28
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.20% 16.10%
Tax rate 22.00% 27.20%
Debt/Equity ratio 2.17 2.17
Cost of debt 5.50% 5.90%
After-tax WACC 6.8% 8.0%
Selected WACC 7.4%

RLGY'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 RLGY:

cost_of_equity (14.15%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (2.14) + 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.