Question 1

What is American Electric Power Company, Inc.'s WACC?

Accepted Answer

American Electric Power Company, Inc. (AEP) has a Weighted Average Cost of Capital (WACC) of 5.43%. This is calculated using a Cost of Equity of 6.60% (via CAPM with a beta of 0.32) and a pre-tax Cost of Debt of 4.44%, with an equity weight of 62.03% in the capital structure.

Question 2

Is American Electric Power Company, Inc.'s WACC high or low?

Accepted Answer

American Electric Power Company, Inc.'s WACC of 5.43% 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 American Electric Power Company, Inc.'s WACC calculated?

Accepted Answer

American Electric Power Company, Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 6.60% is derived from the CAPM model using a beta of 0.32. The pre-tax Cost of Debt (Rd) is 4.44%. The capital structure is 62.03% equity and 37.97% debt.

American Electric Power Company, Inc. (AEP) — WACC 分析

WACC 构成

解读

American Electric Power Company, Inc.（AEP）WACC：5.43%

WACC计算器

American Electric Power Company, Inc.（AEP） WACC 解读

AEP 公司分析

AEP DCF 估值

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