Weighted Average Cost Of Capital

Charge Enterprises, Inc. (CRGE)


+0.01 (+0.30%)
Share price $ 1.665
Beta 3.463
Diluted Shares Outstanding 18.05
Cost of Debt
Tax Rate 9.29
After-tax Cost of Debt 11.27%
Risk-Free Rate
Market Risk Premium
Cost of Equity 20.127
Total Debt 37.11
Total Equity 30.05
Total Capital 67.16
Debt Weighting 55.25
Equity Weighting 44.75

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.