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Realty Income Corporation (O) — WACC Analysis

WACC Breakdown

Realty Income Corporation (O) has a weighted average cost of capital (WACC) of 6.1%. The cost of equity is 7.2%, derived from a beta of 0.39 and a risk-free rate of 4.7%. The after-tax cost of debt is 3.5%. The capital structure is 68.9% equity and 31.1% debt.

Interpretation

A WACC of 6.1% suggests that the market views Realty Income Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare O's WACC of 6.1% against industry peers to gauge its relative financing costs. A beta of 0.39 reflects the stock's volatility relative to the broader market.

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VALUATION

O WACC: 6.09% for Realty Income Corporation

Current inputs imply a 7.24% cost of equity and a 4.48% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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[02]
WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Realty Income Corporation Common Stock (O) WACC Results
Weighted Average Cost of Capital
6.09%
Cost of Equity
7.24%
Risk-Free Rate4.73%
Beta0.39
Market Risk Premium4.23%
Cost of Debt
3.54%
Pre-Tax Cost of Debt4.48%
Tax Rate21.00%
Tax Shield0.94%
Capital Structure
Equity: 68.88%($58.65B)
Debt: 31.12%($26.49B)
Equity Component
4.99%
68.88% × 7.24%
Debt Component
1.10%
31.12% × 3.54%

Realty Income Corporation (O) WACC in context

Realty Income Corporation (O) currently screens with an estimated WACC of 6.09%. That blends a 7.24% cost of equity, a 4.48% pre-tax cost of debt, and a 68.88% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What O WACC implies

A 6.09% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates O

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.39 and equity accounts for 68.88% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.