Institute of Investing

WACC Calculator

Note: JavaScript is disabled. Formula:
WACC = (E/V * Re) + ((D/V * Rd) * (1 - T))

Market Value of Equity ($)

Market Value of Debt ($)

Cost of Equity (%)

Calculate via CAPM

Cost of Debt (%)

Interest Rate

Corporate Tax Rate (%)

Equity Weight: %

Debt Weight: %

WACC Output %

Methodology

The Weighted Average Cost of Capital (WACC) represents a firm's average cost of capital from all sources, including common stock, preferred stock, bonds, and other forms of debt.

Crucially, interest payments on debt are tax-deductible, which is why the Cost of Debt is multiplied by (1 - Tax Rate), creating a "tax shield."

WACC is the standard discount rate used in DCF modeling to calculate the present value of Free Cash Flow to the Firm (FCFF).