WACC Calculator

Calculate the Weighted Average Cost of Capital (WACC) for your company

Calculate Your Company's Weighted Average Cost of Capital

Cost of Equity

Cost of Equity (%)

Enter your company's cost of equity percentage

Total Equity Value

Enter the market value of equity

Cost of Debt

Cost of Debt (%)

Enter your company's pre-tax cost of debt

Total Debt Value

Enter the market value of debt

Corporate Tax Rate (%)

Enter your corporate tax rate

Understanding WACC (Weighted Average Cost of Capital)

The Weighted Average Cost of Capital (WACC) represents a company's average cost of financing its assets through both debt and equity. It's a crucial metric for:

Evaluating investment opportunities
Making capital budgeting decisions
Determining a company's optimal capital structure
Valuing businesses using discounted cash flow (DCF) analysis

WACC Formula

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

Where:

E = Market value of equity
D = Market value of debt
V = Total market value (E + D)
Re = Cost of equity
Rd = Cost of debt
Tc = Corporate tax rate

How to Use This Calculator

Enter your cost of equity percentage
Input the total market value of equity
Enter your pre-tax cost of debt
Input the total market value of debt
Enter your corporate tax rate
Click "Calculate WACC" to get your results

Pro Tip

For more accurate results, use market values rather than book values when entering equity and debt amounts. The market value of equity can be found by multiplying shares outstanding by the current stock price.

Additional Resources

Frequently Asked Questions

WACC (Weighted Average Cost of Capital) represents the average cost a company pays for its capital, including both equity and debt financing. It's used as a discount rate in financial modeling and capital budgeting decisions.

WACC is calculated by multiplying the cost of each capital component by its proportional weight and summing the results. The formula is: WACC = (E/V × Re) + (D/V × Rd × (1 - T)), where E is equity, D is debt, V is total capital, Re is cost of equity, Rd is cost of debt, and T is tax rate.