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AeroVironment, Inc. (AVAV) — WACC Analysis

WACC Breakdown

AeroVironment, Inc. (AVAV) has a weighted average cost of capital (WACC) of 8.9%. The cost of equity is 9.5%, derived from a beta of 1.12 and a risk-free rate of 5.0%. The after-tax cost of debt is 2.0%. The capital structure is 91.4% equity and 8.6% debt.

Interpretation

A WACC of 8.9% is moderate, reflecting the market's balanced risk assessment of AeroVironment, Inc..

Investors can compare AVAV's WACC of 8.9% against industry peers to gauge its relative financing costs. A beta of 1.12 reflects the stock's volatility relative to the broader market.

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VALUATION

AVAV WACC: 8.88% for AeroVironment, Inc.

Current inputs imply a 9.53% 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

AeroVironment, Inc. Common Stock (AVAV) WACC Results
Weighted Average Cost of Capital
8.88%
Cost of Equity
9.53%
Risk-Free Rate4.96%
Beta1.12
Market Risk Premium4.23%
Cost of Debt
2.00%
Pre-Tax Cost of Debt2.00%
Tax Rate0.00%
Tax Shield0.00%
Capital Structure
Equity: 91.44%($7795.90M)
Debt: 8.56%($730.06M)
Equity Component
8.71%
91.44% × 9.53%
Debt Component
0.17%
8.56% × 2.00%

AeroVironment, Inc. (AVAV) WACC in context

AeroVironment, Inc. (AVAV) currently screens with an estimated WACC of 8.88%. That blends a 9.53% cost of equity, a 2.00% pre-tax cost of debt, and a 91.44% 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 AVAV WACC implies

A 8.88% discount rate falls into a common range for established public companies and is a practical DCF starting point.

How this page calculates AVAV

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.12 and equity accounts for 91.44% 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.