WACC Calculator (Weighted Average Cost of Capital)
Calculate Weighted Average Cost of Capital — the minimum return a company must earn to satisfy all capital providers. WACC is essential for DCF valuation, capital budgeting, and project evaluation.
This free online wacc calculator (weighted average cost of capital) provides instant results with no signup required. All calculations run directly in your browser — your data is never sent to a server. Enter your values below and see results update in real time as you type. Perfect for everyday calculations, homework, or professional use.
Market cap
How to Use This Calculator
Enter your input values
Fill in all required input fields for the WACC Calculator (Weighted Average Cost of Capital). Most fields include unit selectors so you can work in your preferred unit system — metric or imperial, whichever matches your problem.
Review your inputs
Double-check that all values are correct and that you have selected the right units for each field. Incorrect units are the most common source of calculation errors and can produce results that are off by factors of 2, 10, or more.
Read the results
The WACC Calculator (Weighted Average Cost of Capital) instantly computes the output and displays results with units clearly labeled. All calculations happen in your browser — no loading time and no data sent to a server.
Explore parameter sensitivity
Try adjusting individual input values to see how the output changes. This is a quick and effective way to develop intuition about how different parameters influence the result and to identify which inputs have the largest effect.
Formula Reference
WACC Calculator (Weighted Average Cost of Capital) Formula
See calculator inputs for the governing equation
Variables: All variables and their units are labeled in the calculator interface above. Input fields accept values in multiple unit systems — select your preferred unit from the dropdown next to each field.
When to Use This Calculator
- •Use the WACC Calculator (Weighted Average Cost of Capital) when comparing financial options side-by-side — such as different loan terms or investment returns — to make more informed decisions.
- •Use it to quickly estimate costs or returns before making purchasing, investment, or borrowing decisions.
- •Use it for financial education and planning to understand how compound interest, fees, or tax affects the real value of money over time.
- •Use it when building or reviewing a budget to verify that projections and calculations are mathematically correct.
About This Calculator
The WACC Calculator (Weighted Average Cost of Capital) is a free financial calculation tool designed to help individuals and businesses understand key financial concepts and estimate costs, returns, and loan parameters. Calculate Weighted Average Cost of Capital — the minimum return a company must earn to satisfy all capital providers. WACC is essential for DCF valuation, capital budgeting, and project evaluation. The calculations are based on standard financial mathematics formulas. Results are for informational and educational purposes only and should not be considered financial, investment, or tax advice. Consult a qualified financial professional before making financial decisions. All calculations are performed in your browser — no personal financial data is stored or transmitted.
About WACC Calculator (Weighted Average Cost of Capital)
The Weighted Average Cost of Capital (WACC) Calculator computes a company's blended cost of financing from both equity and debt, weighted by their proportions in the capital structure. WACC is arguably the most important number in corporate finance — it's the discount rate used in Discounted Cash Flow (DCF) valuation, the hurdle rate for new investment projects, and the benchmark for measuring whether a company is creating or destroying value. If a company's return on invested capital (ROIC) exceeds its WACC, it's creating shareholder value. If ROIC is below WACC, it's destroying value despite potentially reporting profits.
The Math Behind It
Formula Reference
WACC Formula
WACC = (E/V) × Re + (D/V) × Rd × (1 - Tc)
Variables: E=equity value, D=debt value, V=E+D, Re=cost of equity, Rd=cost of debt, Tc=corporate tax rate
Worked Examples
Example 1: Large Tech Company
A tech company has $800M equity (market cap), $200M debt, 12% cost of equity, 5% cost of debt, and 21% tax rate.
WACC is 10.39%. The company must earn above this rate on new investments to create value.
Example 2: Utility Company
A utility has $400M equity, $600M debt, 8% cost of equity, 4% cost of debt, 25% tax.
WACC of 5.0% — typical for capital-intensive utilities that finance heavily with debt.
Common Mistakes & Tips
- !Using book value of debt and equity instead of market values.
- !Forgetting the tax shield on debt.
- !Using historical cost of debt instead of current yield-to-maturity on outstanding bonds.
- !Applying company-wide WACC to individual projects with different risk profiles.
Related Concepts
Used in These Calculators
Calculators that build on or apply the concepts from this page:
Frequently Asked Questions
Why include taxes in the WACC formula?
Interest on debt is tax-deductible for corporations, creating a tax shield. This lowers the effective cost of debt financing and incentivizes companies to use some debt in their capital structure.
Should I use book value or market value of equity?
Always market value. Book value reflects historical accounting, while market value reflects current investor expectations.
What's the difference between WACC and cost of capital?
Cost of capital is a general term for the required return. WACC is the specific weighted average of the costs of all capital sources (equity and debt).
Can WACC be negative?
No. WACC represents a positive required return. Even cost of debt is positive, and cost of equity is always positive.