Weighted Average Cost Of Capital

Jacques Bogart S.A. (JBOG.PA)

7.84 €

-0.02 (-0.25%)
Share price $ 7.84
Beta 0.935
Diluted Shares Outstanding 14.81
Cost of Debt
Tax Rate 55.85
After-tax Cost of Debt 0.79%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.979
Total Debt 226.63
Total Equity 116.09
Total Capital 342.72
Debt Weighting 66.13
Equity Weighting 33.87

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.