What this calculator does
WACC (weighted average cost of capital) works out the blended return a company must earn to satisfy both lenders and shareholders. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
The inputs explained
| Field | What to enter |
|---|---|
| Market value of equity ($) | A number, measured in your currency. Starts at 7000000. |
| Market value of debt ($) | A number, measured in your currency. Starts at 3000000. |
| Cost of equity (%) | A number, measured in %. Starts at 11. |
| Cost of debt (pre-tax) (%) | A number, measured in %. Starts at 6. |
| Corporate tax rate (%) | A number, measured in %. Starts at 25. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with market value of equity
Every other input is held at the calculator’s starting values while market value of equity varies. Select any row to load that scenario into the calculator.
| Market value of equity ($) | WACC | Weight of equity | Weight of debt |
|---|---|---|---|
| 3,500,000 | 8.00% | 53.8% | 46.2% |
| 5,250,000 | 8.64% | 63.6% | 36.4% |
| 7,000,000 | 9.05% | 70.0% | 30.0% |
| 10,500,000 | 9.56% | 77.8% | 22.2% |
| 14,000,000 | 9.85% | 82.4% | 17.6% |
| 21,000,000 | 10.2% | 87.5% | 12.5% |