Weighted Average Cost Of Capital

Pressure BioSciences, Inc. (PBIO)

$2.055

-0.09 (-3.97%)
Share price $ 2.055
Beta 0.588
Diluted Shares Outstanding 6.64
Cost of Debt
Tax Rate 0.00
After-tax Cost of Debt 98.69%
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.307
Total Debt 14.64
Total Equity 13.64
Total Capital 28.28
Debt Weighting 51.78
Equity Weighting 48.22
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.