Aaron's Company Inc (AAN) WACC Analysis

As of May 27, 2025, Aaron's Company Inc (AAN) carries a Weighted Average Cost of Capital (WACC) of 11.6%. WACC reflects the blended rate Aaron's Company Inc must pay to both equity and debt holders.

Within that, the cost of equity is 7.5%, the cost of debt is 7.0%, and the effective tax rate is 29.7%.

Breakdown of WACC Components

• Long-term bond rate: 3.9% – 4.4%
• Equity market risk premium: 4.6% – 5.6%
• Adjusted beta: 0.79 – 0.97
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.61

What It Means for Investors

With a selected WACC of 11.6%, Aaron's Company Inc must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects a relatively high financing requirement.