FINANCE / COST OF CAPITAL
Weight the supplied costs of equity and debt using market-value financing and an explicit debt tax shield.
METHOD / WORKED EXAMPLE
The calculator keeps capital weights, required returns, and the tax treatment visible so a WACC assumption can be reviewed before valuation use.
WORKED DEFAULT
With $750 million equity, $250 million debt, 12% equity cost, 6% debt cost, and 25% tax, the equity contribution is 9%, debt contribution is 1.125%, and WACC is 10.125%.
READ THE RESULT
WACC is a financing estimate for assets with comparable risk. A project with materially different risk may need a different discount rate.
ASSUMPTIONS AND LIMITS
WACC is sensitive to capital-cost models, market values, tax treatment, and project risk; this page does not select those inputs for you.
COMMON QUESTIONS
Market values are normally preferred because WACC represents current required returns on financing. Book values can be a fallback for a planning scenario, but label the choice and test how sensitive the result is.
The standard compact model reflects a potential tax deduction for interest. The benefit depends on jurisdiction, taxable income, debt rules, and deductibility limits, so replace the rate with an assumption appropriate to the case.
No. A company-wide WACC may be unsuitable for a project with different operating, country, currency, or financing risk. This calculator computes the supplied model; it does not determine the correct discount rate.
RELATED TOOLS
Use boundary
The calculator derives equity and debt weights from their supplied values, applies the tax shield to debt cost, and sums the weighted components.
WACC = E/(D+E) x Re + D/(D+E) x Rd x (1 - tax rate).