Major Indexes

Weighted Average Cost Of Capital

National Western Life Group Inc.

National Western Life Group Inc. (NWLI)

-1.93 (-0.98%)

Weighted Average Cost Of Capital

Share price $ 194.26
Diluted Shares Outstanding 3.44
Cost of Debt
Tax Rate 20.31
After-tax Cost of Debt -0.97
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.30
Total Debt -
Total Equity 667.48
Total Capital 667.48
Debt Weighting 0.00
Equity Weighting 100.00

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.