Weighted Average Cost Of Capital

Host Hotels & Resorts, Inc. (HST)

$16.205

-0.35 (-2.14%)
Share price $ 16.205
Beta 1.221
Diluted Shares Outstanding 710.30
Cost of Debt
Tax Rate 89.22
After-tax Cost of Debt 0.38%
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.638
Total Debt 5,455
Total Equity 11,510.41
Total Capital 16,965.41
Debt Weighting 32.15
Equity Weighting 67.85
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.