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American Eagle Outfitters (AEO) — WACC Analysis

WACC Breakdown

American Eagle Outfitters (AEO) has a weighted average cost of capital (WACC) of 10.1%. The cost of equity is 10.3%, derived from a beta of 1.40 and a risk-free rate of 5.0%. The after-tax cost of debt is 1.6%. The capital structure is 97.9% equity and 2.1% debt.

Interpretation

A WACC of 10.1% is moderate, reflecting the market's balanced risk assessment of American Eagle Outfitters.

Investors can compare AEO's WACC of 10.1% against industry peers to gauge its relative financing costs. A beta of 1.40 reflects the stock's volatility relative to the broader market.

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VALUATION

AEO WACC: 10.14% for American Eagle Outfitters

Current inputs imply a 10.32% cost of equity and a 2.00% 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

American Eagle Outfitters Common Stock (AEO) WACC Results
Weighted Average Cost of Capital
10.14%
Cost of Equity
10.32%
Risk-Free Rate4.96%
Beta1.40
Market Risk Premium4.23%
Cost of Debt
1.58%
Pre-Tax Cost of Debt2.00%
Tax Rate21.00%
Tax Shield0.42%
Capital Structure
Equity: 97.92%($2585.66M)
Debt: 2.08%($55.00M)
Equity Component
10.10%
97.92% × 10.32%
Debt Component
0.03%
2.08% × 1.58%

American Eagle Outfitters (AEO) WACC in context

American Eagle Outfitters (AEO) currently screens with an estimated WACC of 10.14%. That blends a 10.32% cost of equity, a 2.00% pre-tax cost of debt, and a 97.92% 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 AEO WACC implies

A 10.14% discount rate falls into a common range for established public companies and is a practical DCF starting point.

How this page calculates AEO

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.40 and equity accounts for 97.92% 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.