Weighted Average Cost Of Capital

Bridgewater Bancshares, Inc. (BWB)

$16.47

-0.20 (-1.20%)
Share price $ 16.47
Beta 0.679
Diluted Shares Outstanding 29.17
Cost of Debt
Tax Rate 25.80
After-tax Cost of Debt 10.67%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.008
Total Debt 134.74
Total Equity 480.43
Total Capital 615.17
Debt Weighting 21.90
Equity Weighting 78.10
Wacc

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.