Business & investing
WACC Calculator
WACC is the average return a company has to pay the people who fund it, weighted by how much comes from shareholders and how much from lenders. It's the usual discount rate for valuing the whole business.
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How it's calculated
Each source of funding is weighted by its share of the total. Interest on debt is usually tax-deductible, so the cost of debt is reduced by the tax rate before it's weighted.
WACC = E/V × Re + D/V × Rd × (1 − T)
How to do it in Excel
=B1/(B1+B2)*B3 + B2/(B1+B2)*B4*(1-B5)- Equity in B1, debt in B2, cost of equity in B3, cost of debt in B4, tax rate in B5.