Question 1

What is Eaton Corporation, plc Ordinary Shares's WACC?

Accepted Answer

Eaton Corporation, plc Ordinary Shares (ETN) has a Weighted Average Cost of Capital (WACC) of 7.94%. This is calculated using a Cost of Equity of 8.70% (via CAPM with a beta of 1.00) and a pre-tax Cost of Debt of 2.00%, with an equity weight of 89.34% in the capital structure.

Question 2

Is Eaton Corporation, plc Ordinary Shares's WACC high or low?

Accepted Answer

Eaton Corporation, plc Ordinary Shares'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 Eaton Corporation, plc Ordinary Shares's WACC calculated?

Accepted Answer

Eaton Corporation, plc Ordinary Shares's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.70% is derived from the CAPM model using a beta of 1.00. The pre-tax Cost of Debt (Rd) is 2.00%. The capital structure is 89.34% equity and 10.66% debt.

Eaton Corporation, plc Ordinary Shares (ETN) — WACC 分析

WACC 构成

解读

Eaton Corporation, plc Ordinary Shares（ETN）WACC：7.94%

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Eaton Corporation, plc Ordinary Shares（ETN） WACC 解读

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