Question 1

What is United Parcel Service, Inc. Class B's WACC?

Accepted Answer

United Parcel Service, Inc. Class B (UPS) has a Weighted Average Cost of Capital (WACC) of 7.25%. This is calculated using a Cost of Equity of 8.25% (via CAPM with a beta of 0.84) and a pre-tax Cost of Debt of 4.35%, with an equity weight of 79.17% in the capital structure.

Question 2

Is United Parcel Service, Inc. Class B's WACC high or low?

Accepted Answer

United Parcel Service, Inc. Class B's WACC of 7.25% 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 United Parcel Service, Inc. Class B's WACC calculated?

Accepted Answer

United Parcel Service, Inc. Class B's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.25% is derived from the CAPM model using a beta of 0.84. The pre-tax Cost of Debt (Rd) is 4.35%. The capital structure is 79.17% equity and 20.83% debt.

United Parcel Service, Inc. Class B (UPS) — WACC 分析

WACC 构成

解读

United Parcel Service, Inc. Class B（UPS）WACC：7.25%

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United Parcel Service, Inc. Class B（UPS） WACC 解读

UPS 公司分析

UPS DCF 估值

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