RPAI
Retail Properties of America Inc
Price:  
13.15 
USD
Volume:  
41,517,400.00
United States | Equity Real Estate Investment Trusts (REITs)
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RPAI WACC - Weighted Average Cost of Capital

The WACC of Retail Properties of America Inc (RPAI) is 7.8%.

The Cost of Equity of Retail Properties of America Inc (RPAI) is 8.80%.
The Cost of Debt of Retail Properties of America Inc (RPAI) is 8.40%.

Range Selected
Cost of equity 6.80% - 10.80% 8.80%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 4.20% - 12.60% 8.40%
WACC 5.4% - 10.2% 7.8%
WACC

RPAI WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.86 1.26
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 10.80%
Tax rate 27.00% 27.00%
Debt/Equity ratio 0.62 0.62
Cost of debt 4.20% 12.60%
After-tax WACC 5.4% 10.2%
Selected WACC 7.8%

RPAI'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 RPAI:

cost_of_equity (8.80%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.86) + 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.