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American Airlines Group Inc. (AAL) — WACC Analysis

WACC Breakdown

American Airlines Group Inc. (AAL) has a weighted average cost of capital (WACC) of 7.6%. The cost of equity is 11.1%, derived from a beta of 1.58 and a risk-free rate of 5.2%. The after-tax cost of debt is 6.4%. The capital structure is 24.4% equity and 75.6% debt.

Interpretation

A WACC of 7.6% suggests that the market views American Airlines Group Inc. as relatively low-risk, with a lower cost of financing.

Investors can compare AAL's WACC of 7.6% against industry peers to gauge its relative financing costs. A beta of 1.58 reflects the stock's volatility relative to the broader market.

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VALUATION

AAL WACC: 7.58% for American Airlines Group Inc.

Current inputs imply a 11.11% cost of equity and a 6.43% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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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

American Airlines Group Inc. Common Stock (AAL) WACC Results
Weighted Average Cost of Capital
7.58%
Cost of Equity
11.11%
Risk-Free Rate5.24%
Beta1.58
Market Risk Premium4.23%
Cost of Debt
6.43%
Pre-Tax Cost of Debt6.43%
Tax Rate0.00%
Tax Shield0.00%
Capital Structure
Equity: 24.44%($8354.06M)
Debt: 75.56%($25.83B)
Equity Component
2.71%
24.44% × 11.11%
Debt Component
4.86%
75.56% × 6.43%

American Airlines Group Inc. (AAL) WACC in context

American Airlines Group Inc. (AAL) currently screens with an estimated WACC of 7.58%. That blends a 11.11% cost of equity, a 6.43% pre-tax cost of debt, and a 24.44% 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 AAL WACC implies

A 7.58% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates AAL

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.58 and equity accounts for 24.44% 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.