WACC Calculator - Weighted Average Cost of Capital Free

Free WACC calculator to find your company

Enter your input:

Result:

🔢 Calculator

Enter Value

Result

📊 Boopydoop

Wacc Calculator

Quick Converter Tool

🔢 Calculator

Enter Value

Result

Calculate your company's Weighted Average Cost of Capital instantly. Essential for DCF valuation, capital budgeting, and investment decisions.

📈 Enter Your Financials

Total Debt (Market Value)

Outstanding loans, bonds, and other debt obligations

Total Equity (Market Value)

Market cap or estimated equity value

Cost of Debt (Interest Rate)

Average interest rate on your debt

Cost of Equity

Expected return required by shareholders (use CAPM)

Corporate Tax Rate

Marginal corporate tax rate

📋 Your Results

--%

Weighted Average Cost of Capital

Total Capital: --

Weight of Debt (D/V): --%

Weight of Equity (E/V): --%

After-Tax Cost of Debt: --%

Debt Component: --%

Equity Component: --%

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

Where: E = Equity, D = Debt, V = Total Value (E+D), Re = Cost of Equity, Rd = Cost of Debt, Tc = Tax Rate

What is WACC?

The wacc converter computation follows established formulas verified against authoritative sources. Input your values to begin.

Think of WACC as the minimum return a company must earn on its existing asset base to satisfy its creditors, owners, and other providers of capital. If a project's expected return is higher than WACC, it creates value; if lower, it destroys value.

Cost of Debt (Rd): The effective interest rate a company pays on its debt. This includes loans, bonds, and other forms of borrowed capital. Debt interest is tax-deductible, so we use the after-tax cost: Rd × (1 - Tax Rate).

Cost of Equity (Re): The return required by equity investors. This is typically calculated using the Capital Asset Pricing Model (CAPM): Re = Risk-Free Rate + Beta × (Market Return - Risk-Free Rate).

Capital Structure Weights: The proportion of debt and equity in a company's financing. These should be based on market values, not book values.

Book values reflect historical costs, while market values reflect current investor expectations. Since WACC is used to discount future cash flows, market values provide a more accurate picture of a company's true cost of capital.

Industry	Typical WACC Range	Key Drivers
Utilities	5% - 7%	Regulated, stable cash flows, high debt
Consumer Staples	6% - 8%	Defensive, predictable demand
Healthcare	7% - 9%	Mixed risk, regulatory exposure
Industrial	8% - 10%	Cyclical, capital intensive
Technology	9% - 12%	High growth, volatile earnings
Biotech Startups	15% - 25%	High risk, pre-revenue, uncertain outcomes

DCF Valuation: WACC is the discount rate used in Discounted Cash Flow models to calculate the present value of projected free cash flows.

Capital Budgeting: Compare a project's Internal Rate of Return (IRR) to WACC. If IRR > WACC, the project creates value.

Hurdle Rate: Many companies use WACC (plus a risk premium) as the minimum acceptable return for new investments.

Performance Measurement: Compare Return on Invested Capital (ROIC) to WACC. If ROIC > WACC, the company is creating shareholder value.

The Capital Asset Pricing Model (CAPM) formula is:

Cost of Equity = Risk-Free Rate + Beta × (Market Return - Risk-Free Rate)

Risk-Free Rate: Typically the 10-year Treasury bond yield (currently around 4-5%).

Beta: Measures stock volatility relative to the market. Beta of 1 = market average; >1 = more volatile; <1 = less volatile.

Market Return: Historical S&P 500 return averages around 10%.

Market Risk Premium: The difference between market return and risk-free rate, typically 4-6%.

Using book values: Always use market values for debt and equity weights
Ignoring the tax shield: Remember to adjust cost of debt for tax benefits
Wrong beta: Use levered beta for the company's current capital structure
Static WACC: WACC should be recalculated as capital structure changes
Ignoring preferred stock: If present, include it as a third component

Frequently Asked Questions About Wacc Calculator

What precision does this use?

IEEE 754 double-precision floating-point, approximately 15-17 significant decimal digits.

How is input validated?

Range checking, type validation, and format verification occur before calculation.

O(1) for standard operations. Results are instantaneous for practical purposes.

Boundary conditions are tested and handled according to mathematical conventions.

Expert Tips for Wacc Calculator

Don't just note the number - make sure you understand what your Wacc Utility result means for your specific situation.

If you'll need Wacc Tool calculations again, bookmark this page for quick future access.

For critical decisions involving Wacc Tool, verify your result using an additional method or tool.

Apply your Wacc Converter calculation to real planning decisions. The value comes from acting on the result, not just knowing it.

Common Wacc Calculator Mistakes to Avoid

Double-check your inputs. A mistyped number gives wrong results.

Verify you're reading the correct output field, especially with multiple results.

Results depend on input units. Ensure you're using the right units throughout.

For critical decisions, verify results with an additional source or method.

Wacc Calculator Quick Reference

This quick reference provides common values and conversions related to wacc converter. Use this as a handy lookup when you need approximate values quickly.

Input	Result	Notes
Standard Value 1	Result 1	Common use case
Standard Value 2	Result 2	Typical scenario
Standard Value 3	Result 3	Professional standard
Standard Value 4	Result 4	Industry default
Standard Value 5	Result 5	Reference point

Input

Result

Notes

Standard Value 1

Result 1

Common use case

Standard Value 2

Result 2

Typical scenario

Standard Value 3

Result 3

Professional standard

Standard Value 4

Result 4

Industry default

Standard Value 5

Result 5

Reference point

Understanding the underlying formulas helps you verify results and perform manual calculations when needed:

Basic Formula: The fundamental calculation method used by this tool

Alternative Method: An equivalent approach that may be useful in certain situations

Quick Estimate: A simplified version for rough calculations

Users working with wacc converter often need these related conversions:

Metric to Imperial conversions

Scale transformations

Unit equivalencies

Percentage calculations

When to Use the Wacc Calculator Calculator

This wacc converter computer serves various professional and personal needs. Understanding the best use cases helps you get maximum value from this tool.

Business Planning: Use this utility when preparing reports, proposals, or analyses that require accurate wacc utility calculations. The instant results save time compared to manual methods, and the consistency helps avoid errors in professional documents.

Academic Work: Students and researchers rely on this computer for homework, research, and educational purposes. The detailed explanations help build understanding while ensuring correct answers.

Technical Projects: Engineers, scientists, and technical professionals use this tool for quick verifications during project work. Having a reliable utility available speeds up workflows and catches potential errors early.

Daily Calculations: For everyday situations where you need a quick, accurate answer without doing mental math or hunting for a physical computer.

Decision Making: When comparing options or planning ahead, accurate calculations help you make informed choices. This might include financial decisions, measurement comparisons, or time planning.

Learning: Use this utility alongside manual practice to verify your understanding. Working problems by hand first, then checking with the tool, builds both skill and confidence.