ED
Consolidated Edison Inc
Price:  
100.46 
USD
Volume:  
1,865,360
United States | Multi-Utilities

ED WACC - Weighted Average Cost of Capital

The WACC of Consolidated Edison Inc (ED) is 5.7%.

The Cost of Equity of Consolidated Edison Inc (ED) is 7.05%.
The Cost of Debt of Consolidated Edison Inc (ED) is 4.45%.

RangeSelected
Cost of equity6.1% - 8.0%7.05%
Tax rate14.4% - 15.4%14.9%
Cost of debt4.0% - 4.9%4.45%
WACC4.9% - 6.4%5.7%
WACC

ED WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.480.56
Additional risk adjustments0.0%0.5%
Cost of equity6.1%8.0%
Tax rate14.4%15.4%
Debt/Equity ratio
0.750.75
Cost of debt4.0%4.9%
After-tax WACC4.9%6.4%
Selected WACC5.7%

ED'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 ED:

cost_of_equity (7.05%) = 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.