RVLV
Revolve Group Inc
Price:  
19.89 
USD
Volume:  
1,522,019
United States | Internet & Direct Marketing Retail

RVLV WACC - Weighted Average Cost of Capital

The WACC of Revolve Group Inc (RVLV) is 7.5%.

The Cost of Equity of Revolve Group Inc (RVLV) is 11%.
The Cost of Debt of Revolve Group Inc (RVLV) is 5%.

RangeSelected
Cost of equity8.3% - 13.7%11%
Tax rate16.2% - 23.8%20%
Cost of debt5.0% - 5.0%5%
WACC6.2% - 8.8%7.5%
WACC

RVLV WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.961.58
Additional risk adjustments0.0%0.5%
Cost of equity8.3%13.7%
Tax rate16.2%23.8%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC6.2%8.8%
Selected WACC7.5%

RVLV'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 RVLV:

cost_of_equity (11.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.96) + 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.