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wacc calculator

WACC Calculator

Total Debt

Cost of Debt

Total Equity

Cost of Equity

Corporate Tax Rate

Result

Weighted Average Cost of Capital

0.0 %

wacc calculator

You have to fill all fields that you see on the left side to know Weighted Average Cost of Capital (WACC).

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The expert’s staff of calculator-online provided a remarkable online WACC calculator that uses the simple weighted average cost of capital formula to perform WACC calculation within a blink of eyes.

Well, before knowing about this weighted average cost of capital calculator, let’s start with the term “WACC.’

What Is A WACC?

WACC is an acronym for a Weighted Average Cost of Capital; it is said to be as the average after-tax cost of a firm’s various capital sources, including common shares, preferred shares, and debt. More specifically, WACC is the average that a firm expects to pay to finance its assets. The purpose of calculating WACC to figure out the cost of each part of the firm’s capital structure that depends on the proportion of equity, debt, and preferred stock it has. Keep in mind, all components of the cost of capital are calculated at the current market rates.

What Is The WACC Formula?

WACC formula uses simple WACC equation for a calculation of a firm’s cost of capital in which each category is proportionally weighted. It is said to be as the average rate that a firm is expected to pay to its stakeholders that helps to finance its assets.

The mathematical WACC equation of the formula for WACC is as follows:

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

Where:

WACC Calculator:

Yes, this simple but highly accurate tool helps to calculate WACC or the weighted average cost of capital a firm considering the simple WACC formula. The calculation by our weighted average cost of capital calculator can be done according to the input values of the cost of equity, total equity, cost of debt, total debt and corporate tax rate.

Read on to know how this weight of debt calculator works!

How to Find WACC With This Tool:

The calculation of the weighted cost of capital becomes easy with this smart tool, read on to know about the step-by-step guide:

How to Calculate WACC (Manually)?

To find WACC, you can use the above simple WACC formula – let we explain with the example and how to do a weighted average cost of capital calculation.

Suppose the firm has the following information:

Let, put these values into the mathematical WACC equation of the weighted average cost formula:

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

WACC = [(14000 / 14000 + 6000) × 0.125] + [(6000 / 14000 + 6000) × 0.07 × (1 − 0.2)]

The WACC for this firm is 10.43%

However, you can put these all values in the above simple wacc calculator to get the same answer!

Final Thoughts:

No doubt, knowing about the WACC or weighted average cost of capital for a firm is immensely important as it is a way to gauge the expense of funding future projects. According to optimistic studies, the lower a firm’s WACC, the cheaper it is for a firm to fund new projects.

The WACC formula assists in evaluating whether the company should finance the purchase of new assets with debt or equity by comparing the cost of both options. So, use the above weighted average cost calculator to understand how to calculate the WACC.