Question 1

What is Automatic Data Processing's WACC?

Accepted Answer

Automatic Data Processing (ADP) has a Weighted Average Cost of Capital (WACC) of 7.94%. This is calculated using a Cost of Equity of 7.89% (via CAPM with a beta of 0.72) and a pre-tax Cost of Debt of 11.36%, with an equity weight of 95.71% in the capital structure.

Question 2

Is Automatic Data Processing's WACC high or low?

Accepted Answer

Automatic Data Processing's WACC of 7.94% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is Automatic Data Processing's WACC calculated?

Accepted Answer

Automatic Data Processing's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 7.89% is derived from the CAPM model using a beta of 0.72. The pre-tax Cost of Debt (Rd) is 11.36%. The capital structure is 95.71% equity and 4.29% debt.

Automatic Data Processing (ADP) — WACC 分析

WACC 构成

解读

Automatic Data Processing（ADP）WACC：7.94%

WACC计算器

Automatic Data Processing（ADP） WACC 解读

ADP 公司分析

ADP DCF 估值

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