Weighted Average Cost Of Capital Calculator

W a c c e d e r e d d e r d 1 t w a c c e d e r e d d e r d 1 t.

Weighted average cost of capital calculator. The calculator uses the following basic formula to calculate the weighted average cost of capital. Using the wacc calculator our online weighted average cost of capital calculator helps you easily calculate the cost of raising capital of any business. All sources of capital including common. The weighted average cost of capital wacc is a calculation of a firm s cost of capital in which each category of capital is proportionately weighted.

Wacc is the weighted average cost of capital r e is the cost of equity r. The ratio of debt to equity in a company is used to determine which source should be utilized to fund new purchases. To calculate wacc use the wacc formula which is. Wacc e v r e d v r d 1 t c where.

Wacc definition in finance the weighted average cost of capital or wacc is the rate that a company is expected to pay on average to all its security holders to finance its assets. Simply enter the cost of raising capital through equity debt and the corporate tax the business operates under. Wacc e e d ce d e d cd 100 t where. Calculating the weighted average cost of capital once you have calculated the cost of capital for all the sources of debt and equity and gathered the other information needed you can calculate the wacc.

This metric is what we refer to as the weighted average cost of capital or wacc. E refers to the equity d ce. E market value of the firm s equity d market value of the firm s debt v e d r e cost of equity r d cost of debt t c. Wacc e v r e d v r d 1 t c where.

Wacc e v r e d v r d 1 t c v e d where wacc weighted average cost of capital e market value of the firm s equity d market value of the firm s debt v firm value r e cost of equity r d cost of debt t c corporate tax rate. Wacc e v x re d v x rd x 1 t let s look at an example.