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Automatic Data Processing (ADP) — WACC Analysis

WACC Breakdown

Automatic Data Processing (ADP) has a weighted average cost of capital (WACC) of 8.5%. The cost of equity is 8.5%, derived from a beta of 0.68 and a risk-free rate of 5.2%. The after-tax cost of debt is 7.3%. The capital structure is 95.6% equity and 4.4% debt.

Interpretation

A WACC of 8.5% is moderate, reflecting the market's balanced risk assessment of Automatic Data Processing.

Investors can compare ADP's WACC of 8.5% against industry peers to gauge its relative financing costs. A beta of 0.68 reflects the stock's volatility relative to the broader market.

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VALUATION

ADP WACC: 8.49% for Automatic Data Processing

Current inputs imply a 8.55% cost of equity and a 9.25% 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

Automatic Data Processing Common Stock (ADP) WACC Results
Weighted Average Cost of Capital
8.49%
Cost of Equity
8.55%
Risk-Free Rate5.22%
Beta0.68
Market Risk Premium4.23%
Cost of Debt
7.31%
Pre-Tax Cost of Debt9.25%
Tax Rate21.00%
Tax Shield1.94%
Capital Structure
Equity: 95.62%($108.50B)
Debt: 4.38%($4965.10M)
Equity Component
8.17%
95.62% × 8.55%
Debt Component
0.32%
4.38% × 7.31%

Automatic Data Processing (ADP) WACC in context

Automatic Data Processing (ADP) currently screens with an estimated WACC of 8.49%. That blends a 8.55% cost of equity, a 9.25% pre-tax cost of debt, and a 95.62% equity weight into the discount rate you would typically use in a DCF model.

falls into a common range for established public companies and is a practical DCF starting point.

What ADP WACC implies

A 8.49% discount rate falls into a common range for established public companies and is a practical DCF starting point.

How this page calculates ADP

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.68 and equity accounts for 95.62% 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.