RPD
Rapid7 Inc
Price:  
24.37 
USD
Volume:  
317,341
United States | Software

RPD WACC - Weighted Average Cost of Capital

The WACC of Rapid7 Inc (RPD) is 7.0%.

The Cost of Equity of Rapid7 Inc (RPD) is 8.6%.
The Cost of Debt of Rapid7 Inc (RPD) is 4.55%.

RangeSelected
Cost of equity6.6% - 10.6%8.6%
Tax rate2.0% - 4.3%3.15%
Cost of debt4.0% - 5.1%4.55%
WACC5.5% - 8.4%7.0%
WACC

RPD WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.591.02
Additional risk adjustments0.0%0.5%
Cost of equity6.6%10.6%
Tax rate2.0%4.3%
Debt/Equity ratio
0.640.64
Cost of debt4.0%5.1%
After-tax WACC5.5%8.4%
Selected WACC7.0%

RPD'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 RPD:

cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.