Weighted Average Cost Of Capital

Intercorp Financial Services Inc. (IFS)


+0.36 (+1.64%)
Share price $ 22.31
Beta 0.792
Diluted Shares Outstanding 115.42
Cost of Debt
Tax Rate 23.48
After-tax Cost of Debt 11.57%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.427
Total Debt 10,475.99
Total Equity 2,574.98
Total Capital 13,050.97
Debt Weighting 80.27
Equity Weighting 19.73

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.