WACC Calculator
Parameter | Description | Example Value |
---|---|---|
Cost of Equity | The return required by equity investors. | 8% |
Cost of Debt | The effective rate that a company pays on its borrowed funds. | 4% |
Market Value of Equity | The total market value of the company’s equity (market capitalization). | $200,000 |
Market Value of Debt | The total market value of the company’s debt. | $100,000 |
Tax Rate | The corporate tax rate. | 30% |
WACC | The weighted average cost of capital (Cost of Equity * (Market Value of Equity / (Market Value of Equity + Market Value of Debt)) + Cost of Debt * (1 – Tax Rate) * (Market Value of Debt / (Market Value of Equity + Market Value of Debt))). | 6.2% |