RUN
Sunrun Inc
Price:  
7.49 
USD
Volume:  
25,349,852.00
United States | Electrical Equipment
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RUN WACC - Weighted Average Cost of Capital

The WACC of Sunrun Inc (RUN) is 7.4%.

The Cost of Equity of Sunrun Inc (RUN) is 18.75%.
The Cost of Debt of Sunrun Inc (RUN) is 6.00%.

Range Selected
Cost of equity 14.70% - 22.80% 18.75%
Tax rate 0.60% - 0.80% 0.70%
Cost of debt 5.00% - 7.00% 6.00%
WACC 6.1% - 8.8% 7.4%
WACC

RUN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2.36 3.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 14.70% 22.80%
Tax rate 0.60% 0.80%
Debt/Equity ratio 7.59 7.59
Cost of debt 5.00% 7.00%
After-tax WACC 6.1% 8.8%
Selected WACC 7.4%

RUN'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 RUN:

cost_of_equity (18.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.36) + 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.