Weighted Average Cost Of Capital

Markel Corporation

Markel Corporation (MKL)

Financial Services

Share price $ 1,154.97
Diluted Shares Outstanding 13.88
Cost of Debt
Tax Rate -2,155.90
After-tax Cost of Debt 107.84
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.24
Total Debt 2,721.00
Total Equity 16,036.35
Total Capital 18,757.35
Debt Weighting 14.51
Equity Weighting 85.49

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.