Major Indexes

Weighted Average Cost Of Capital

Seaboard Corporation

Seaboard Corporation (SEB)

20.98 (+0.72%)

Weighted Average Cost Of Capital

Share price $ 2,922
Diluted Shares Outstanding 1.16
Cost of Debt
Tax Rate 0.35
After-tax Cost of Debt 0.03
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.86
Total Debt 730.00
Total Equity 3,400.88
Total Capital 4,130.88
Debt Weighting 17.67
Equity Weighting 82.33

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.