WACC Calculator
WACC = (E/V)·Re + (D/V)·Rd·(1−T). Blended cost of capital weighted by debt + equity.
Result
WACC
9.096%
Equity weight 60.0%, debt weight 40.0%.
- E (equity)$600
- D (debt)$400
- V = E + D$1,000
- E/V60.00%
- D/V40.00%
- Re12.00%
- Rd × (1−T)4.74%
- WACC9.096%
Step-by-step
- WACC = (E/V) Re + (D/V) Rd (1−T).
- = 0.6000 × 0.1200 + 0.4000 × 0.0600 × 0.7900.
- = 9.096%.
How to use this calculator
- Enter market values of equity + debt.
- Cost of equity from CAPM; debt from yield to maturity.
- Tax rate ~21% federal US 2025.
About this calculator
WACC = average cost the firm pays to finance assets, weighted by capital structure mix. After-tax debt cost (Rd × (1−T)) reflects interest tax shield. Used as discount rate in DCF valuation: cash flows above WACC create value, below destroy it. Typical US WACC: 6-10% large-cap, 10-15% mid/small-cap, 15-25% startup/early-stage.
Frequently asked
Interest is tax-deductible; saves T × interest. Effective cost of $1 debt interest = $1 × (1−T).
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