Weighted Average Cost Of Capital

AgroGeneration SA (ALAGR.PA)

0.0849 €

+0.00 (+1.07%)
Share price $ 0.0,849
Beta 0.544
Diluted Shares Outstanding 226.66
Cost of Debt
Tax Rate -0.80
After-tax Cost of Debt 4.69%
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.101
Total Debt 24.60
Total Equity 19.24
Total Capital 43.84
Debt Weighting 56.11
Equity Weighting 43.89

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.