Use our free Weighted Average Cost of Capital (WACC) Calculator to determine the average rate of return a company expects to pay to finance its assets. Understanding WACC is vital for financial modeling, project valuation, and making sound capital budgeting decisions.
Formula:
The formula for the Weighted Average Cost of Capital (WACC) is:
WACC = (E/V) * Re + (D/V) * Rd * (1 - Tc)
- E = Market Value of Equity
- D = Market Value of Debt
- V = Total Market Value of Equity + Debt (V = E + D)
- Re = Cost of Equity (as a percentage)
- Rd = Cost of Debt (as a percentage)
- Tc = Corporate Tax Rate (as a percentage)