Weighted Average Cost Of Capital

NortonLifeLock Inc. (NLOK)


-0.50 (-2.26%)
Share price $ 21.66
Beta 0.999
Diluted Shares Outstanding 591
Cost of Debt
Tax Rate 19.77
After-tax Cost of Debt 2.64%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.404
Total Debt 3,829
Total Equity 12,801.06
Total Capital 16,630.06
Debt Weighting 23.02
Equity Weighting 76.98

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.