Major Indexes

Weighted Average Cost Of Capital

Akorn Inc.

Akorn Inc. (AKRX)

-0.0937 (-51.01%)

Weighted Average Cost Of Capital

Share price $ 0.09
Diluted Shares Outstanding 125.98
Cost of Debt
Tax Rate 21.20
After-tax Cost of Debt -1.01
Risk-Free Rate
Market Risk Premium
Cost of Equity 17.25
Total Debt 843.33
Total Equity 11.34
Total Capital 854.67
Debt Weighting 98.67
Equity Weighting 1.33

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.