Weighted Average Cost Of Capital

MGM Resorts International (MGG.DE)

38.8 €

+0.40 (+1.03%)
Share price $ 38.8
Beta 2.280
Diluted Shares Outstanding 487.36
Cost of Debt
Tax Rate 14.19
After-tax Cost of Debt 2.79%
Risk-Free Rate
Market Risk Premium
Cost of Equity 14.293
Total Debt 24,573.26
Total Equity 18,909.41
Total Capital 43,482.67
Debt Weighting 56.51
Equity Weighting 43.49

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.