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Royalty Pharma plc Class A Ordinary Shares (RPRX) — WACC Analysis

WACC Breakdown

Royalty Pharma plc Class A Ordinary Shares (RPRX) has a weighted average cost of capital (WACC) of 7.7%. The cost of equity is 9.2%, derived from a beta of 1.00 and a risk-free rate of 5.0%. The after-tax cost of debt is 3.2%. The capital structure is 74.6% equity and 25.4% debt.

Interpretation

A WACC of 7.7% suggests that the market views Royalty Pharma plc Class A Ordinary Shares as relatively low-risk, with a lower cost of financing.

Investors can compare RPRX's WACC of 7.7% against industry peers to gauge its relative financing costs. A beta of 1.00 reflects the stock's volatility relative to the broader market.

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VALUATION

RPRX WACC: 7.66% for Royalty Pharma plc Class A Ordinary Shares

Current inputs imply a 9.19% cost of equity and a 4.03% 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

Royalty Pharma plc Class A Ordinary Shares Common Stock (RPRX) WACC Results
Weighted Average Cost of Capital
7.66%
Cost of Equity
9.19%
Risk-Free Rate4.96%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
3.18%
Pre-Tax Cost of Debt4.03%
Tax Rate21.00%
Tax Shield0.85%
Capital Structure
Equity: 74.58%($26.29B)
Debt: 25.42%($8961.89M)
Equity Component
6.85%
74.58% × 9.19%
Debt Component
0.81%
25.42% × 3.18%

Royalty Pharma plc Class A Ordinary Shares (RPRX) WACC in context

Royalty Pharma plc Class A Ordinary Shares (RPRX) currently screens with an estimated WACC of 7.66%. That blends a 9.19% cost of equity, a 4.03% pre-tax cost of debt, and a 74.58% 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 RPRX WACC implies

A 7.66% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates RPRX

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.00 and equity accounts for 74.58% 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.