Weighted Average Cost Of Capital

The Liberty Braves Group (BATRK)


+0.73 (+2.24%)
Share price $ 33.25
Beta 0.898
Diluted Shares Outstanding 60
Cost of Debt
Tax Rate -266.67
After-tax Cost of Debt 0.13%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.745
Total Debt 18,590
Total Equity 1,995
Total Capital 20,585
Debt Weighting 90.31
Equity Weighting 9.69

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.