WACC Calculator
Estimate WACC from market-value financing weights, equity cost, and after-tax debt cost.
Result
Review or adjust your inputs, then calculate to see your results and interpretation.
Understand this calculation
WACC averages the returns required by capital providers. The modeled interest tax shield depends on tax rules and sufficient taxable income.
See calculation method and assumptions
Formula
WACC
Variables, rates and periods
- E
- Equity market value, in the same amount unit as debt.
- D
- Debt market value; E + D must be positive.
- Re
- Cost of equity.
- Rd
- Pre-tax cost of debt.
- T
- Marginal tax rate, 0–100%; assumes deductible interest.
Match the cash flows
- This tool models one equity source and one debt source.
- Preferred stock or other financing sources need their own weights and costs;
- the result is not a complete valuation.
Inspect the capital structure
- Scaling both market values equally leaves WACC unchanged.
- All-equity or all-debt inputs are allowed;
- unused financing costs remain assumptions rather than contributions.
Estimate WACC from market-value financing weights, equity cost, and after-tax debt cost.
Worked example
- Enter equity market value 600 and debt market value 400 in the same currency.
- After-tax debt cost is 5% × (1−20%) = 4%.
- Add equity contribution 6% and debt contribution 1.6% to get 7.6%.
Frequently asked questions
Should I use market or book values?
Market or target market-value weights are usual. Book values reflect accounting history; use them as a documented proxy only when market values are unavailable and the approximation is reasonable.
Can WACC be used for DCF?
Use it to discount FCFF with matching risk, currency, and horizon. Equity cash flows usually use cost of equity, and projects with different risks need an appropriate rate.