WACC calculator
Weight equity and after-tax debt costs by their market values.
Formula
WACC = E/(E+D) × Re + D/(E+D) × Rd × (1−T); enter rates as percentages.
Weighted average cost of capital ≈ (600,000)÷((600,000)+(400,000))×(10)+(400,000)÷((600,000)+(400,000))×(5)×(1-(20)÷100)
How to use
- Enter market values of debt and equity in one currency.
- Enter annual equity cost, debt cost and applicable marginal tax rate.
- Read WACC under the assumed full interest tax shield.
Examples
- Equity 60 at 10%, debt 40 at 5%, tax 20%: WACC 7.6%.
Frequently asked questions
Can both capital values be zero?
No. At least one must be positive to define weights.
Which tax rate should I use?
Your applicable marginal corporate tax assumption; the default is only an example.
Does this cover all capital structures?
No. It models common equity and debt, without preferred stock or limits on interest deductibility.
Sources
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