Weighted Average Cost Of Capital

Caisse régionale de Crédit Agricole... (CRAV.PA)

70.19 €

+0.19 (+0.27%)
Share price $ 70.19
Beta 0.374
Diluted Shares Outstanding 7.39
Cost of Debt
Tax Rate 24.42
After-tax Cost of Debt 30.66%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.457
Total Debt 426.37
Total Equity 518.71
Total Capital 945.08
Debt Weighting 45.11
Equity Weighting 54.89

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.