Weighted Average Cost Of Capital

Surface Oncology, Inc. (SURF)


+0.00 (+0.62%)
Share price $ 0.7,662
Beta 1.683
Diluted Shares Outstanding 55.76
Cost of Debt
Tax Rate 0.00
After-tax Cost of Debt 10.33%
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.636
Total Debt 30.45
Total Equity 42.72
Total Capital 73.18
Debt Weighting 41.61
Equity Weighting 58.39

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.