WACC calculator
Blend a company’s cost of equity and after-tax cost of debt into its weighted average cost of capital — the hurdle rate it must beat and the discount rate a DCF uses.
Runs entirely in your browserRuns entirely on your device — nothing you type is sent anywhere. Educational only, and not investment advice.
How to use this calculator
Each step names a control you will find on screen above.
- Equity and debt values
The amount of each kind of capital. Their proportions become the weights — use market values where you can.
- Cost of equity
The return shareholders require, usually from CAPM. It is the larger of the two costs because equity bears the most risk.
- Cost of debt
The interest rate on the company’s borrowing, before tax.
- Tax rate
Applied to the cost of debt, because interest is tax-deductible — this tax shield is what makes debt cheaper.
Worked example: A 70/30 capital structure
70% equity at a 14% cost of equity, 30% debt at a 9% pre-tax cost, 25% tax rate.
What to enter
- Equity value
- ₹700
- Debt value
- ₹300
- Cost of equity
- 14%
- Cost of debt
- 9%
- Tax rate
- 25%
What it shows you
- After-tax cost of debt
- 6.75%
- Equity weight
- 70%
- WACC
- ≈ 11.8%
- Use as
- DCF discount rate / hurdle
Where this is taught
A calculator gives you a number. These explain what the number means and when it misleads you.
- Fundamental Analysis11 minWACC: the blended cost every company must beatA company funds itself with equity and debt, each with its own cost. WACC blends them into one hurdle rate — the discount rate a DCF uses and the bar every investment must clear.
- Fundamental Analysis11 minCAPM: the price of risk, and your cost of equityEvery valuation needs a discount rate, and the cost of equity is where it starts. How the Capital Asset Pricing Model turns a stock’s risk into a required return, and how to use — and distrust — the answer.
- Fundamental Analysis12 minDiscounted cash flowBuild a valuation from first principles, then watch how badly it wobbles — which is the actual lesson.