RPD
Rapid7 Inc
Price:  
25.23 
USD
Volume:  
561,365.00
United States | Software
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RPD WACC - Weighted Average Cost of Capital

The WACC of Rapid7 Inc (RPD) is 7.1%.

The Cost of Equity of Rapid7 Inc (RPD) is 8.70%.
The Cost of Debt of Rapid7 Inc (RPD) is 4.55%.

Range Selected
Cost of equity 6.60% - 10.80% 8.70%
Tax rate 2.00% - 4.30% 3.15%
Cost of debt 4.00% - 5.10% 4.55%
WACC 5.6% - 8.6% 7.1%
WACC

RPD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.59 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 10.80%
Tax rate 2.00% 4.30%
Debt/Equity ratio 0.61 0.61
Cost of debt 4.00% 5.10%
After-tax WACC 5.6% 8.6%
Selected WACC 7.1%

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 (8.70%) = 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.