Weighted Average Cost Of Capital

Barrick Gold Corporation (GOLD)

$16.2

+0.60 (+3.85%)
Share price $ 16.2
Beta 0.168
Diluted Shares Outstanding 1,779
Cost of Debt
Tax Rate 56.35
After-tax Cost of Debt 2.75%
Risk-Free Rate
Market Risk Premium
Cost of Equity 3.559
Total Debt 5,473
Total Equity 28,819.80
Total Capital 34,292.80
Debt Weighting 15.96
Equity Weighting 84.04
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.