RMAX
Re/Max Holdings Inc
Price:  
8.18 
USD
Volume:  
231,711.00
United States | Real Estate Management & Development
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RMAX WACC - Weighted Average Cost of Capital

The WACC of Re/Max Holdings Inc (RMAX) is 8.6%.

The Cost of Equity of Re/Max Holdings Inc (RMAX) is 12.00%.
The Cost of Debt of Re/Max Holdings Inc (RMAX) is 9.30%.

Range Selected
Cost of equity 10.30% - 13.70% 12.00%
Tax rate 30.70% - 34.90% 32.80%
Cost of debt 6.20% - 12.40% 9.30%
WACC 6.8% - 10.4% 8.6%
WACC

RMAX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.39 1.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.30% 13.70%
Tax rate 30.70% 34.90%
Debt/Equity ratio 1.38 1.38
Cost of debt 6.20% 12.40%
After-tax WACC 6.8% 10.4%
Selected WACC 8.6%

RMAX'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 RMAX:

cost_of_equity (12.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.39) + 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.