RNG
RingCentral Inc
Price:  
27.79 
USD
Volume:  
2,560,000.00
United States | Software
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RNG WACC - Weighted Average Cost of Capital

The WACC of RingCentral Inc (RNG) is 10.8%.

The Cost of Equity of RingCentral Inc (RNG) is 10.05%.
The Cost of Debt of RingCentral Inc (RNG) is 12.45%.

Range Selected
Cost of equity 8.30% - 11.80% 10.05%
Tax rate 0.90% - 2.80% 1.85%
Cost of debt 4.00% - 20.90% 12.45%
WACC 6.7% - 15.0% 10.8%
WACC

RNG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.96 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 11.80%
Tax rate 0.90% 2.80%
Debt/Equity ratio 0.61 0.61
Cost of debt 4.00% 20.90%
After-tax WACC 6.7% 15.0%
Selected WACC 10.8%

RNG'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 RNG:

cost_of_equity (10.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.96) + 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.