RRTS
Roadrunner Transportation Systems Inc
Price:  
3.15 
USD
Volume:  
7,420.00
United States | Road & Rail
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RRTS WACC - Weighted Average Cost of Capital

The WACC of Roadrunner Transportation Systems Inc (RRTS) is 6.4%.

The Cost of Equity of Roadrunner Transportation Systems Inc (RRTS) is 10.25%.
The Cost of Debt of Roadrunner Transportation Systems Inc (RRTS) is 5.50%.

Range Selected
Cost of equity 7.60% - 12.90% 10.25%
Tax rate 11.40% - 15.40% 13.40%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.8% - 8.1% 6.4%
WACC

RRTS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.8 1.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 12.90%
Tax rate 11.40% 15.40%
Debt/Equity ratio 2.25 2.25
Cost of debt 4.00% 7.00%
After-tax WACC 4.8% 8.1%
Selected WACC 6.4%

RRTS'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 RRTS:

cost_of_equity (10.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.8) + 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.