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WACC Calculator

Use the WACC Calculator for a transparent, instant calculation with validated inputs and cited sources. For a query such as “wacc formula”, enter the matching values and units below and review the stated assumptions.

Learn the method: step-by-step examples and practice ↓

Inputs

Results update as you type.

* Required
x ≥ 0
x ≥ 0
%
%
%0 ≤ x ≤ 100

Result

Results update as you type.

Weighted average cost of capital
8.422 %

Calculate, then understand

Step-by-step learning lab

Identify whose cash flow this is and when it occurs. Enter the given values, then follow the calculation as each number changes.

Weighted average cost of capital

What average cost does the firm face when financed by shareholders and lenders?

When to use it and why it works

Shareholders require an equity return and lenders charge interest. Weight their costs by market values rather than averaging them equally, and use the after-tax debt cost when the assumed interest tax shield is available.

WACC = E/(E+D) × Ke + D/(E+D) × Kd × (1−T)

Work through an example

Equity is 700,000 and debt 300,000; equity costs 10%, pre-tax debt costs 6%, and tax is 21%. Find WACC.

Read this example’s explanation

Weights are 70% and 30%; after-tax debt costs 4.74%. WACC = 70% × 10% + 30% × 4.74% = 8.422%.

Turn the question into inputs

Equity market value at the valuation date, in the same currency and scale as debt.
Allowed range: ≥ 0

Market value of interest-bearing debt at the same date. This model uses gross debt and does not automatically subtract cash.
Allowed range: ≥ 0

Shareholders’ required annual return; enter 10 for 10%. This is not the dividend yield already paid.

Annual financing cost in the same currency, before the tax shield. Enter 6 for 6%.

Tax rate assumed for interest deductibility; enter 21 for 21%. Check whether the tax benefit is usable.
Allowed range: ≥ 0 · ≤ 100

Your calculated answer

Weighted average cost of capital
8.422%

Follow each step

  1. Divide equity value by total capital value to obtain the equity weight.

    700000 / (700000 + 300000) = 0.7

  2. Divide debt value by total capital value to obtain the debt weight.

    300000 / (700000 + 300000) = 0.3

  3. Multiply pre-tax debt cost by one minus the tax rate.

    6 × (1 − 21 / 100) = 4.74

  4. Add weighted equity cost and weighted after-tax debt cost.

    0.7 × 10 + 0.3 × 4.74 = 8.422

Intermediate calculations retain precision; displayed values are rounded. Follow the precision requested by your question.

What the result means

WACC is a candidate discount rate for firm cash flows under the assumed financing mix and risk. It is not shareholders’ realized return or a universal hurdle for projects with different risks.

Mistakes to watch for

  • E and D cannot both be zero. Market-value weights must sum to one.
  • Apply 1 − T only to pre-tax debt cost, not to equity cost.
  • This model contains only equity and debt, not preferred stock. Losses or deduction limits can prevent use of the full assumed tax shield.

Try another question on your own

Equity is 600, debt 400, equity cost 12%, pre-tax debt cost 5%, and tax 20%. Find WACC.

Set up the formula first. Answers rounded to two decimals are accepted; use six decimals for absolute values below 0.01. For percentages, enter the number before the percent sign.

How to use this calculator

Enter the requested values and units.

Review the assumptions and any warnings shown with the result.

Use the result together with the cited source and your real-world requirements.

Formula

Compute WACC = E ÷ (D + E) × costOfEquity + D ÷ (D + E) × preTaxCostOfDebt × (1 − taxRate).

Worked example

Worked example: Inputs: Market value of equity: 700,000; Market value of debt: 300,000; Cost of equity: 10 %; Pre-tax cost of debt: 6 %; Corporate tax rate: 21 %. Outputs: Weighted average cost of capital: 8.422 %.

Assumptions and limits

  • The result depends on the values, units, and assumptions entered. It does not infer missing context.

Sources

Related calculators

Verification

How this calculator is checked

Trust comes from reproducible evidence, not model confidence. You can inspect the formula, assumptions, worked example, and cited sources on this page.

Formula finance-wacc-v2Source metadata dated 2026-08-14Editorial and AI policy

Frequently asked questions

How does the WACC Calculator work?

Compute WACC = E ÷ (D + E) × costOfEquity + D ÷ (D + E) × preTaxCostOfDebt × (1 − taxRate).

What should I enter?

Market value of equity, Market value of debt, Cost of equity, Pre-tax cost of debt, Corporate tax rate

What should I verify?

Review the assumptions and any warnings shown with the result. The result depends on the values, units, and assumptions entered. It does not infer missing context.

Last updated 2026-08-25 · finance-wacc-v2 · opportunity-source-2026-08-24 · Published by YunFanLabs