Finance · 2026-06-16

WACC and CAPM: Estimating Your Discount Rate

How WACC, CAPM, beta, risk-free rate and capital structure affect financial model valuation.

WACC is the blended return required by equity and debt investors. It is one of the most important valuation assumptions because it determines how future cash flows are discounted.

CAPM estimates cost of equity using risk-free rate, beta and market risk premium. Debt cost is usually adjusted for tax because interest is often tax-deductible.

EasyFinancialModels lets users enter WACC directly or build it through CAPM while keeping each assumption visible in the workbook.

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