Aberdeen Asia-Pacific Income Investment Company Ltd (FAP.TO) WACC Analysis

As of May 27, 2025, Aberdeen Asia-Pacific Income Investment Company Ltd (FAP.TO) carries a Weighted Average Cost of Capital (WACC) of 6.5%. WACC reflects the blended rate Aberdeen Asia-Pacific Income Investment Company Ltd must pay to both equity and debt holders.

Within that, the cost of equity is 6.8%, the cost of debt is 5.0%, and the effective tax rate is 25.9%.

Breakdown of WACC Components

• Long-term bond rate: 3.2% – 3.7%
• Equity market risk premium: 5.1% – 6.1%
• Adjusted beta: 0.71 – 0.83
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 0.54

What It Means for Investors

With a selected WACC of 6.5%, Aberdeen Asia-Pacific Income Investment Company Ltd must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.