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Alexandria Real Estate Equities, Inc. (ARE) — WACC Analysis

WACC Breakdown

Alexandria Real Estate Equities, Inc. (ARE) has a weighted average cost of capital (WACC) of 4.5%. The cost of equity is 9.1%, derived from a beta of 0.91 and a risk-free rate of 5.1%. The after-tax cost of debt is 2.0%. The capital structure is 35.9% equity and 64.1% debt.

Interpretation

A WACC of 4.5% suggests that the market views Alexandria Real Estate Equities, Inc. as relatively low-risk, with a lower cost of financing.

Investors can compare ARE's WACC of 4.5% against industry peers to gauge its relative financing costs. A beta of 0.91 reflects the stock's volatility relative to the broader market.

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VALUATION

ARE WACC: 4.54% for Alexandria Real Estate Equities, Inc.

Current inputs imply a 9.08% 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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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

Alexandria Real Estate Equities, Inc. Common Stock (ARE) WACC Results
Weighted Average Cost of Capital
4.54%
Cost of Equity
9.08%
Risk-Free Rate5.10%
Beta0.91
Market Risk Premium4.23%
Cost of Debt
2.00%
Pre-Tax Cost of Debt2.00%
Tax Rate0.00%
Tax Shield0.00%
Capital Structure
Equity: 35.86%($7162.61M)
Debt: 64.14%($12.81B)
Equity Component
3.25%
35.86% × 9.08%
Debt Component
1.28%
64.14% × 2.00%

Alexandria Real Estate Equities, Inc. (ARE) WACC in context

Alexandria Real Estate Equities, Inc. (ARE) currently screens with an estimated WACC of 4.54%. That blends a 9.08% cost of equity, a 2.00% pre-tax cost of debt, and a 35.86% 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 ARE WACC implies

A 4.54% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates ARE

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.91 and equity accounts for 35.86% 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.