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Corporate Finance · Cost of Capital

Weighted Average Cost of Capital (WACC)

Blend your cost of equity and after-tax cost of debt, weighted by how your business is actually capitalized, into a single hurdle rate.

Reading This Tool

How To Use This Calculator

Enter the market value of your equity and debt, along with the cost of each.

Use the CAPM tool first if you need to estimate cost of equity, and your actual borrowing rate for cost of debt. The donut shows how your capital is actually weighted between the two; the WACC figure at the top is the minimum return any new investment needs to clear to be worth funding.

Your Inputs

Cost of equity is often estimated separately using CAPM. If you haven't calculated yours yet, our CAPM tool feeds directly into this one.

Blended Result

-

Weighted Average Cost of Capital

0.00%

After-Tax Cost of Debt

0%

Equity Weight

0%

Debt Weight

0%

Capital Structure Weighting

Equity, $0 Debt, $0

What This Rate Is Actually For

WACC is the minimum return a project or investment needs to clear to be worth funding. Debt's tax-deductibility structurally lowers the blended rate up to a point, but more debt also raises risk, which eventually pushes both Ke and Kd higher.

This calculates WACC from the inputs you provide, it doesn't estimate Ke or Kd for you. Use market data, comparable company betas, or your actual borrowing rate for the most defensible result.

Feed this straight into a real DCF valuation.