# WACC Calculator – Weighted Average Cost of Capital

URL: https://speedycalculator.com/calculators/finance/wacc/
Last updated: 2026-10-25

> The WACC calculator works out a company's weighted average cost of capital from the cost and market value of its equity and debt and the corporate tax rate – the discount rate used in DCF valuations.

## Inputs

- Cost of equity (%)
- Equity (market value)
- Cost of debt (pre-tax) (%)
- Debt
- Corporate tax rate (%)

## Results

- Weight of equity
- Weight of debt
- After-tax cost of debt
- Weighted average cost of capital (WACC)

## Formula

```
WACC = E ÷ (D + E) × cost of equity + D ÷ (D + E) × cost of debt × (1 − tax rate)
```

## Explanation

WACC is the average return a company must earn to satisfy all its investors. Projects earning more than WACC create value. Because debt interest is tax-deductible, the after-tax cost of debt is used.

### How to use the WACC Calculator – Weighted Average Cost of Capital

- **Cost of equity**
- **Equity (market value)**
- **Cost of debt (pre-tax)**
- **Debt**
- **Corporate tax rate**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the cost of equity, market value of equity, cost of debt, value of debt and the corporate tax rate.

### Tips

- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.

### Common mistakes to avoid

- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.

### Inputs explained

FieldWhat to enterCost of equityIn %Equity (market value)Amount in your currencyCost of debt (pre-tax)In %DebtAmount in your currencyCorporate tax rateIn %

### What each result means

- **Weight of equity** = [Equity (market value)]÷([Debt] + [Equity (market value)])×100
- **Weight of debt** = [Debt]÷([Debt] + [Equity (market value)])×100
- **After-tax cost of debt** = [Cost of debt (pre-tax)]×(1 - [Corporate tax rate]÷100)
- **Weighted average cost of capital (WACC)** = [Weight of equity]÷100×[Cost of equity] + [Weight of debt]÷100×[After-tax cost of debt]

### Example values

How the main result changes when **Cost of equity** changes and everything else stays at the example values above:

Cost of equity (%)Weighted average cost of capital (WACC) (%)54.917.56.58108.2512.59.911511.582014.91

## Worked example

Inputs — Cost of equity: 10 %; Equity (market value): $600,000,000; Cost of debt (pre-tax): 6 %; Debt: $300,000,000; Corporate tax rate: 21 %.

Results — Weight of equity = 66.67 %; Weight of debt = 33.33 %; After-tax cost of debt = 4.74 %; **Weighted average cost of capital (WACC) = 8.25 %**.

## FAQ

**What is a good WACC?**
Lower is better for the company; typical values are 6–12%.

**Why is debt cheaper than equity?**
Lenders take less risk, and interest is tax-deductible.

**Should I use book or market values?**
Market values are preferred.

**What formula does the WACC Calculator – Weighted Average Cost of Capital use?**
WACC = E ÷ (D + E) × cost of equity + D ÷ (D + E) × cost of debt × (1 − tax rate).


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)