WACC Calculator

Calculate weighted average cost of capital from equity, debt, and tax rate.

By Konstantin Iakovlev · Updated September 2026 · Source: SEC

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WACC

9.28%

Components

Equity Weight62.50%
Debt Weight37.50%
After-Tax Cost of Debt4.74%
WACC9.28%

Use the WACC Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

A company's weighted average cost of capital sets the bar that any new project has to clear, which is why it anchors so many investment and financing decisions. The logic is concrete: a project throwing off an 8% return would still be turned down if the firm's WACC sits at 10%, because it fails to cover the cost of the money funding it.

The formula blends the cost of equity (Ke) with the after-tax cost of debt (Kd * (1 - Tax Rate)), each weighted by its share of the capital structure, E/(E+D) for equity and D/(E+D) for debt. The result is the combined rate of return that debt holders and equity holders together expect.

The output is only as good as the inputs behind it, so stale market data or a misstated tax rate can throw the whole number off. Because WACC looks ahead rather than back, the expected future costs of equity and debt carry far more weight here than historical averages do.

Example: Tech Innovators Inc. WACC Calculation

  1. 1 Input: Equity Value = $500,000,000; Debt Value = $200,000,000; Cost of Equity = 12.5%; Cost of Debt = 6.0%; Corporate Tax Rate = 21%.
  2. 2 Calculation: Equity Weight = 500M / (500M + 200M) = 0.7143. Debt Weight = 200M / (500M + 200M) = 0.2857. After-tax Cost of Debt = 6.0% * (1 - 0.21) = 4.74%. WACC = (0.7143 * 12.5%) + (0.2857 * 4.74%).
  3. 3 Intermediate Result: (8.92875% from equity) + (1.3542% from debt) = 10.28295%.
  4. 4 Final Result: The Weighted Average Cost of Capital (WACC) for Tech Innovators Inc. is 10.28%. This means the company needs to generate at least a 10.28% return on its investments to satisfy its capital providers.

Source: SEC · Last updated: September 2026

Frequently Asked Questions

What is WACC used for?
WACC (weighted average cost of capital) is the minimum return a company must earn on its existing assets to satisfy its creditors, owners, and investors. It is used as the discount rate in DCF valuations and as a hurdle rate for evaluating new projects.
How do I calculate WACC?
WACC = (E/V x Re) + (D/V x Rd x (1-T)), where E is equity value, D is debt value, V is total value (E+D), Re is cost of equity, Rd is cost of debt, and T is the corporate tax rate. The tax adjustment on debt reflects the tax deductibility of interest.
What is a typical WACC for a company?
WACC varies by industry and risk profile. Aswath Damodaran's January 2026 dataset for US companies puts the market-wide cost of capital at 6.96% (7.72% excluding financial firms). Software (system and application) comes in at 9.34% and semiconductors at 10.55%, because those firms are funded almost entirely with equity and carry higher betas; general utilities sit at 4.36%, with lower betas and more debt.

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