EDP Energias de Portugal SA (EDP.LS) WACC Analysis

As of May 23, 2025, EDP Energias de Portugal SA (EDP.LS) carries a Weighted Average Cost of Capital (WACC) of 6.5%. WACC reflects the blended rate EDP Energias de Portugal SA must pay to both equity and debt holders.

Within that, the cost of equity is 9.6%, the cost of debt is 5.0%, and the effective tax rate is 22.8%.

Breakdown of WACC Components

• Long-term bond rate: 2.9% – 3.4%
• Equity market risk premium: 6.9% – 7.8%
• Adjusted beta: 0.98 – 1.04
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 1.62

What It Means for Investors

With a selected WACC of 6.5%, EDP Energias de Portugal SA must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.