WACC Calculator

Calculate the weighted average cost of capital (WACC) for your company and analyze its capital structure.

Capital Structure Parameters

$
%
0%15%30%
$
%
0%15%30%
%
0%25%50%

Preferred Stock (Optional)

$
%

WACC Results

WACC
10.50%
Cost of Equity
12.00%
After-Tax Cost of Debt
4.50%
Tax Shield
1.50%

Capital Structure

Total Capital:$1.00M
Equity Weight:80.00%
Debt Weight:20.00%
Debt-to-Equity Ratio:0.25

Cost Breakdown

Cost of Equity:12.00%
Cost of Debt (Pre-Tax):6.00%
Tax Rate:25.00%
Tax Savings on Debt:1.50%
After-Tax Cost of Debt:4.50%

Capital Structure

Cost Comparison

Sensitivity Analysis (Cost of Equity Impact)

WACC Insights

  • %

    Your company's WACC is 10.50% - this represents the average rate of return required by all security holders (debt and equity).

  • ✓

    Investment Decision Rule: Projects with returns higher than your WACC (10.50%) create value for shareholders. Those with lower returns destroy value.

  • ⚖️

    Capital Structure: Your debt-to-equity ratio is 0.25. The tax shield from debt financing reduces your WACC by approximately 1.50%.

Understanding the cost of capital is important business, investors, and financial analysts. Our WACC Calculator can quickly calculate the Weighted Average Cost of Capital (WACC) for your company and help you analyze your capital structure. Using the WACC Calculator, you can evaluate the cost of equity, cost of debt and after-tax costs of financing which helps lead to better financial decisions.

Whether you are a CFO arranging your investments, an entrepreneur capitalizing on a business, or an investor looking for the level of risk, the WACC Calculator will provide useful data that is accurate and applicable.

WACC Calculator

What is WACC?

The Weighted Average Cost of Capital (WACC) is the average rate of return, which represent both debt and equity holders, that a company will be required to pay. It represents the general required return for all of the company's assets, and indicates the minimum return that a company will need to maintain on a new investment, that satisfies investors.

Our WACC Calculator provides a breakdown of equity costs, debt costs, and the effects of corporate tax to give you insight into each component that makes up your company's cost of capital.

Why You Should Use Our WACC Calculator?

Instant Results - Input your company's equity, debt, and tax values and they will calculate in real time.
Capital Structure Breakdown - View your equity vs debt ratio in graphs that are easy to read.
Cost Comparisons - Compare the cost of debt, cost of equity, and total WACC.
Sensitivity Analysis - See how changes in your equity cost flows through to your overall WACC.
Business Insights - Understand whether your WACC is high or low and how it could impact whether you should use leverage or not.

This WACC calculator will save time, reduce manual errors, while providing professional (financial), and financial grade calculations you can trust.

How the WACC Calculator Works

The WACC Calculator uses the following formula:

WACC = (E/V x Re) + (D/V x Rd x (1 - Tc))

Where:

E = Market value of equity
D = Market value of debt
V = Total capital (E + D)
Re = Cost of equity
Rd = Cost of debt
Tc = Corporate tax rate

Our calculator automatically computes:

Equity Weight vs. Debt Weight
After-tax Cost of Debt
Total Weighted Cost of Capital
Sensitivity analysis for decision-making

This will allow any investor, finance professional or student to calculate WACC precisely.

Benefits of Using the WACC Calculator

1.
Investment Decisions - Determine whether the expected ROI of your project is better than your WACC.
2.
Business Valuation - Include WACC in your discounted cash flow (DCF) models for business valuations.
3.
Risk Assessment - Compare your cost of capital for debt to equity financing.
4.
Capital Budgeting - Weigh various financing options and make your capital structure effective.
5.
Investor Confidence - Show stakeholders that you are accurate with financial planning.

With the WACC Calculator, you will get reliable insights that will improve your business growth and funding strategies.

A WACC Calculator is a great and useful financial tool to determine the cost of capital, decide on new investments, and value businesses. By calculating the Weighted Average Cost of Capital, you will get clarity about whether a company's projects are going to yield enough profits to make them worth pursuing.

Start calculating your WACC and simplify your financial planning, decision-making and shareholder value today with the WACC Calculator.

FAQs

A WACC Calculator is a finance tool that computes the Weighted Average Cost of Capital by calculating the combination of equity and debt costs. It is used to identify the minimum required return a business must earn on its investments.

WACC is important because it indicates the minimum return required for a business to please its investors. If a business's return on investing is below its WACC, it is diminishing shareholder value.

You can calculate WACC using the equation WACC = (E/V x Re) + (D/V x Rd x (1 - Tc)), however, our WACC Calculator is the much quicker, easier and less irritating method!

Yes. WACC is impacted by any of the market, interest rate, company risk, capital structure, or investor expectations. Using a WACC Calculator frequently will help remind professionals of any recent changes.

Definitely! Investors utilize the WACC Calculator to see if a company is producing satisfactory returns in comparison to the cost of capital, as well as compared to other investment options.

Our WACC Calculator is built with standard financial formulas and tested for accuracy. Results are reliable for academic, professional, and corporate use.