APTV
Aptiv PLC
Price:  
66.81 
USD
Volume:  
3,737,510.00
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Aptiv WACC - Weighted Average Cost of Capital

The WACC of Aptiv PLC (APTV) is 7.1%.

The Cost of Equity of Aptiv PLC (APTV) is 8.80%.
The Cost of Debt of Aptiv PLC (APTV) is 4.60%.

Range Selected
Cost of equity 7.50% - 10.10% 8.80%
Tax rate 10.80% - 11.50% 11.15%
Cost of debt 4.30% - 4.90% 4.60%
WACC 6.2% - 8.0% 7.1%
WACC

Aptiv WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.79 0.94
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 10.10%
Tax rate 10.80% 11.50%
Debt/Equity ratio 0.57 0.57
Cost of debt 4.30% 4.90%
After-tax WACC 6.2% 8.0%
Selected WACC 7.1%

Aptiv'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 Aptiv:

cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.