WACC Calculator — Weighted Average Cost of Capital
WACC (Weighted Average Cost of Capital) is the blended return a company must pay its investors: WACC = E/(E+D) × Ke + D/(E+D) × Kd × (1 − tax). Enter your equity, debt, cost of equity, cost of debt and tax rate below to compute it instantly.
WACC = (E ÷ (E + D)) × Ke + (D ÷ (E + D)) × Kd × (1 − Tax Rate)
Worked example (default inputs)
| Equity value ($) | 1000000 |
| Debt value ($) | 500000 |
| Cost of equity Ke (%) | 11.1 |
| Pre-tax cost of debt Kd (%) | 8 |
| Tax rate (%) | 21 |
| Equity weight | 66.67% |
| Debt weight | 33.33% |
| After-tax cost of debt | 6.32% |
| WACC | 9.51% |
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Frequently asked questions
What is a good WACC?
Most established companies fall between 7% and 12%; venture-stage startups are often 18–25% to reflect risk. Capital-intensive infrastructure (solar, telecom, data centers) is typically 9–12%.
Why is the cost of debt after-tax?
Interest is usually tax-deductible, so debt's true cost to shareholders is Kd × (1 − tax rate). A 8% loan at a 21% tax rate effectively costs 6.32%.
Where is WACC used in a financial model?
As the discount rate in DCF valuation — future free cash flows and the terminal value are discounted at WACC to compute enterprise value.
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