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 5.46%. This is calculated using a Cost of Equity of 6.85% (via CAPM with a beta of 0.31) and a pre-tax Cost of Debt of 4.30%, with an equity weight of 59.66% 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 5.46% 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 6.85% is derived from the CAPM model using a beta of 0.31. The pre-tax Cost of Debt (Rd) is 4.30%. The capital structure is 59.66% equity and 40.34% debt.

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

WACC 构成

解读

American Electric Power Company, Inc.（AEP）WACC：5.46%

WACC计算器

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

AEP 公司分析

AEP DCF 估值

继续做同行对比