Compute the Weighted Average Cost of Capital to evaluate investment decisions and company valuation.
Equity Weight (%)
Cost of Equity (%)
Debt Weight (%)
Cost of Debt (%)
Corporate Tax Rate (%)
Use this calculator to estimate the weighted cost of equity and debt financing.
01
Add the equity and debt weights as percentages of the company’s capital structure. Use market value weights where available for valuation work.
02
Enter cost of equity and pre-tax cost of debt. These should reflect current risk, market rates, and financing terms rather than outdated historical assumptions.
03
Add the corporate tax rate so the calculator can estimate after-tax cost of debt. This matters because the tax shield changes the weighted average cost of capital.
04
Calculate WACC and after-tax cost of debt. Test small changes in cost of equity, cost of debt, or leverage to see how sensitive valuation assumptions may be.
Estimate cost of capital for valuation, investment review, and financing decisions.
01
Use WACC as a discount-rate input for unlevered free cash flow models and enterprise value analysis.
02
Test different debt and equity weights to understand how capital structure changes the weighted cost of capital.
03
Quickly see how tax rate, debt cost, or equity cost affects the final WACC before sharing valuation or investment models.
04
Compare expected project returns with WACC to judge whether an investment may create value above the company’s required return.
A WACC calculator estimates weighted average cost of capital by combining the cost of equity and the after-tax cost of debt based on the company’s capital structure. It is often used in valuation and investment analysis.
WACC equals equity weight multiplied by cost of equity plus debt weight multiplied by cost of debt multiplied by one minus the tax rate. This calculator applies that structure to return a percentage cost of capital.
Interest expense is usually tax-deductible, so debt financing often has an after-tax cost below the stated interest rate. The calculator applies the corporate tax rate to estimate after-tax cost of debt.
In a discounted cash flow model, WACC is commonly used as the discount rate for unlevered free cash flows. A higher WACC lowers present value, while a lower WACC increases estimated enterprise value.
Yes. For a clean WACC estimate, equity weight and debt weight should represent the full capital structure and add to 100%. If they do not, normalize them before relying on the result.
WACC changes when market risk, interest rates, capital structure, tax rate, beta, credit spreads, or investor return expectations change. Review assumptions whenever financing conditions or business risk changes materially.
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