APEI
American Public Education Inc
Price:  
24.83 
USD
Volume:  
176,280.00
United States | Diversified Consumer Services
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APEI WACC - Weighted Average Cost of Capital

The WACC of American Public Education Inc (APEI) is 7.4%.

The Cost of Equity of American Public Education Inc (APEI) is 8.15%.
The Cost of Debt of American Public Education Inc (APEI) is 5.60%.

Range Selected
Cost of equity 6.10% - 10.20% 8.15%
Tax rate 25.90% - 27.80% 26.85%
Cost of debt 5.60% - 5.60% 5.60%
WACC 5.7% - 9.1% 7.4%
WACC

APEI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.48 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 10.20%
Tax rate 25.90% 27.80%
Debt/Equity ratio 0.21 0.21
Cost of debt 5.60% 5.60%
After-tax WACC 5.7% 9.1%
Selected WACC 7.4%

APEI's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for APEI:

cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.48) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.