Weighted Average Cost Of Capital

Air Lease Corporation (AL)


0.00 (0.00%)
Share price $ 44.64
Beta 1.783
Diluted Shares Outstanding 114.01
Cost of Debt
Tax Rate 19.29
After-tax Cost of Debt 0.24%
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.936
Total Debt 17,022.48
Total Equity 5,089.59
Total Capital 22,112.07
Debt Weighting 76.98
Equity Weighting 23.02

There are a number of methods that can be used to determine discount rates. A good approach – and the one we’ll use in this tutorial – is to use the weighted average cost of capital (WACC) – a blend of the cost of equity and after-tax cost of debt. A company has two primary sources of financing – debt and equity – and, in simple terms, WACC is the average cost of raising that money. WACC is calculated by multiplying the cost of each capital source (debt and equity) by its relevant weight and then adding the products together to determine the WACC value.