Weighted Average Cost Of Capital

Caisse Regionale de Credit Agricole... (CAT31.PA)

63.37 €

+0.56 (+0.89%)
Share price $ 63.37
Beta 0.512
Diluted Shares Outstanding 4.58
Cost of Debt
Tax Rate 23.42
After-tax Cost of Debt 28.78%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.921
Total Debt 247.74
Total Equity 290.06
Total Capital 537.80
Debt Weighting 46.07
Equity Weighting 53.93
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.