Weighted Average Cost Of Capital

Taseko Mines Limited (TKO.TO)


-0.01 (-0.78%)
Share price $ 1.915
Beta 2.118
Diluted Shares Outstanding 287.50
Cost of Debt
Tax Rate 48.50
After-tax Cost of Debt 3.75%
Risk-Free Rate
Market Risk Premium
Cost of Equity 13.597
Total Debt 533.10
Total Equity 550.57
Total Capital 1,083.67
Debt Weighting 49.19
Equity Weighting 50.81

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.