Major Indexes

Weighted Average Cost Of Capital

Raven Industries Inc.

Raven Industries Inc. (RAVN)

0.6 (+2.95%)

Weighted Average Cost Of Capital

Share price $ 20.91
Diluted Shares Outstanding 36.22
Cost of Debt
Tax Rate 12.08
After-tax Cost of Debt -0.55
Risk-Free Rate
Market Risk Premium
Cost of Equity 14.08
Total Debt 2.37
Total Equity 757.27
Total Capital 759.64
Debt Weighting 0.31
Equity Weighting 99.69

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.