Weighted Average Cost Of Capital

Crawford & Company (CRD-B)

$6.65

-0.07 (-1.04%)
Share price $ 6.65
Beta 0.521
Diluted Shares Outstanding 53.38
Cost of Debt
Tax Rate 30.03
After-tax Cost of Debt 1.69%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.249
Total Debt 288.67
Total Equity 355
Total Capital 643.67
Debt Weighting 44.85
Equity Weighting 55.15
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.