Royal Mail PLC (RMG.L) WACC Analysis

As of May 25, 2025, Royal Mail PLC (RMG.L) carries a Weighted Average Cost of Capital (WACC) of 8.7%. WACC reflects the blended rate Royal Mail PLC must pay to both equity and debt holders.

Within that, the cost of equity is 11.1%, the cost of debt is 4.0%, and the effective tax rate is 13.2%.

Breakdown of WACC Components

• Long-term bond rate: 4.4% – 4.9%
• Equity market risk premium: 6.4% – 7.4%
• Adjusted beta: 1.03 – 1.56
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 1.28

What It Means for Investors

With a selected WACC of 8.7%, Royal Mail PLC must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a moderate financing cost structure.