WACC Calculator with Formula & Breakdown

WACC Calculator (with formula and breakdown): compute weighted average cost of capital, estimate cost of equity via CAPM, and include taxes, debt, and preferred stock for valuation and DCF.

WACC formula (weighted average cost of capital)

\begin{align} WACC &=\frac{E}{V}\times r_{E}+\frac{D}{V}\times r_{D}\times (1-t)+\frac{P}{V}\times r_{P}\\ V &= D+E+P \end{align}

Cost of equity (r_E)

%

Estimate cost of equity with CAPM

Total Equity (E)

Cost of debt (r_D)

%

Total Debt (D)

Corporate tax rate (t) wacc-tax-help

%

Default corporate tax for this locale (United States): 21.00%. Indicative only, verify current local rules.

Include preferred stock (advanced)

WACC:

10.80%

WACC calculation breakdown:

Equity weight (E/V)	-
Debt weight (D/V)	-
Preferred stock weight (P/V)	-
After-tax cost of debt: rD x (1 - t)	-
Equity contribution: (E/V) x rE	-
Debt contribution: (D/V) x rD x (1 - t)	-
Preferred stock contribution: (P/V) x rP	-

WACC Calculator FAQ

How to calculate WACC?
Use this formula: WACC = (E/V) x rE + (D/V) x rD x (1 - t). If preferred stock is used, add: (P/V) x rP. Here V = E + D (+ P).

When should I use WACC?
Use WACC as a discount rate in DCF and valuation when cash flows represent the whole firm (FCFF). It is also useful for capital budgeting and hurdle-rate decisions.

What are common WACC mistakes?
Common mistakes are mixing book and market values, using inconsistent tax assumptions, using the wrong cash-flow type, and forgetting preferred stock when it is material.

WACC vs discount rate: what is the difference?
WACC is one specific type of discount rate based on a firm’s capital structure and financing costs. Discount rate is a broader term and can be adjusted above or below WACC depending on project risk.

» WACC Calculator with Formula and Breakdown

WACC formula (weighted average cost of capital)

Initial Data

Result

WACC Calculator FAQ

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