Weighted Average Cost Of Capital

Heineken Holding N.V. (HEIO.AS)

70.5 €

+0.30 (+0.43%)
Share price $ 70.5
Beta 0.743
Diluted Shares Outstanding 288.03
Cost of Debt
Tax Rate 61.63
After-tax Cost of Debt 1.11%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.471
Total Debt 16,873
Total Equity 20,306.13
Total Capital 37,179.13
Debt Weighting 45.38
Equity Weighting 54.62
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.