Weighted Average Cost Of Capital

Chuy's Holdings, Inc. (CHUY)

$23.36

+0.17 (+0.73%)
Share price $ 23.36
Beta 1.770
Diluted Shares Outstanding 20.10
Cost of Debt
Tax Rate 11.92
After-tax Cost of Debt 0.06%
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.235
Total Debt 201.74
Total Equity 469.55
Total Capital 671.29
Debt Weighting 30.05
Equity Weighting 69.95
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.