{
  "id": "wacc",
  "version": "b47709e3baef",
  "status": "published",
  "name": "WACC Calculator",
  "question": "What is my WACC?",
  "summary": "Computes the weighted average cost of capital (WACC) from the market values and costs of equity, debt and preferred stock, with debt counted after tax.",
  "category": "finance",
  "subcategory": "business",
  "url": "https://www.acalculator.org/finance/wacc-calculator",
  "markdown": "https://www.acalculator.org/finance/wacc-calculator.md",
  "kind": "function",
  "method": "WACC = E ÷ V × re + D ÷ V × rd × (1 − T) + P ÷ V × rp, where V = E + D + P are market values, re, rd and rp the costs of equity, debt and preferred stock, and T the tax rate.",
  "assumptions": [
    "Weights use the market values you type, not book values.",
    "Interest on debt is tax-deductible at the tax rate you type; preferred dividends and equity returns are not.",
    "Arithmetic is exact on the typed decimals; results round once for display."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "e": {
        "title": "Market value of equity",
        "description": "Share price times shares outstanding.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "re": {
        "title": "Cost of equity",
        "description": "The return shareholders require, for example from CAPM.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 1000
      },
      "d": {
        "title": "Market value of debt",
        "description": "What the company’s bonds and loans are worth today.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "rd": {
        "title": "Cost of debt (before tax)",
        "description": "The yield to maturity on the company’s debt.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 1000
      },
      "t": {
        "title": "Tax rate",
        "description": "The corporate tax rate that interest is deducted at.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 100
      },
      "p": {
        "title": "Market value of preferred stock",
        "description": "Leave at 0 if there is none.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "rp": {
        "title": "Cost of preferred stock",
        "description": "Preferred dividend ÷ preferred share price.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 1000
      }
    }
  },
  "outputs": {
    "wacc": {
      "label": "WACC",
      "description": "The weighted average cost of capital.",
      "format": "percent"
    },
    "afterTaxDebt": {
      "label": "After-tax cost of debt",
      "description": "Cost of debt × (1 − tax rate).",
      "format": "percent"
    },
    "total": {
      "label": "Total capital",
      "description": "Equity + debt + preferred stock.",
      "format": "money"
    },
    "equityWeight": {
      "label": "Equity weight",
      "description": "Equity ÷ total capital.",
      "format": "percent"
    },
    "debtWeight": {
      "label": "Debt weight",
      "description": "Debt ÷ total capital.",
      "format": "percent"
    },
    "preferredWeight": {
      "label": "Preferred weight",
      "description": "Preferred stock ÷ total capital.",
      "format": "percent"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "e": 756000000,
      "re": 13.4,
      "d": 244000000,
      "rd": 6.312,
      "t": 21,
      "p": 0,
      "rp": 0
    },
    "outputs": {
      "wacc": 11.34710112,
      "afterTaxDebt": 4.98648,
      "total": 1000000000,
      "equityWeight": 75.6,
      "debtWeight": 24.4,
      "preferredWeight": 0
    },
    "text": "With 75.6% equity, 24.4% debt and 0% preferred stock, the WACC is 11.35%."
  },
  "examples": [
    {
      "given": {
        "e": 756,
        "re": 13.4,
        "d": 244,
        "rd": 6.312,
        "t": 21
      },
      "expect": {
        "wacc": 11.34710112,
        "afterTaxDebt": 4.98648
      },
      "source": "OpenStax, Principles of Finance, 17.3 Calculating the Weighted Average Cost of Capital (WACC = D% × rd(1 − T) + P% × rpfd + E% × re). https://openstax.org/books/principles-finance/pages/17-3-calculating-the-weighted-average-cost-of-capital; OpenStax 17.2 gives the 6.312% yield and 21% tax rate (after tax 4.986%). Hand calculation in content.mdx: 0.244 × 4.98648 + 0.756 × 13.4 = 11.3471 (OpenStax rounds the parts and shows 11.33%)"
    },
    {
      "given": {
        "e": 600000,
        "re": 10,
        "d": 400000,
        "rd": 5,
        "t": 25
      },
      "expect": {
        "wacc": 7.5,
        "afterTaxDebt": 3.75,
        "equityWeight": 60,
        "debtWeight": 40
      },
      "source": "OpenStax, Principles of Finance, 17.3 Calculating the Weighted Average Cost of Capital (WACC = D% × rd(1 − T) + P% × rpfd + E% × re). https://openstax.org/books/principles-finance/pages/17-3-calculating-the-weighted-average-cost-of-capital; hand calculation in content.mdx: 0.6 × 10 + 0.4 × 5 × 0.75 = 7.5"
    },
    {
      "given": {
        "e": 500,
        "re": 12,
        "d": 300,
        "rd": 6,
        "t": 21,
        "p": 200,
        "rp": 8
      },
      "expect": {
        "wacc": 9.022,
        "preferredWeight": 20
      },
      "source": "OpenStax, Principles of Finance, 17.3 Calculating the Weighted Average Cost of Capital (WACC = D% × rd(1 − T) + P% × rpfd + E% × re). https://openstax.org/books/principles-finance/pages/17-3-calculating-the-weighted-average-cost-of-capital; hand calculation in content.mdx: 0.5 × 12 + 0.3 × 4.74 + 0.2 × 8 = 9.022"
    }
  ],
  "sources": [
    "OpenStax, Principles of Finance, 17.3 Calculating the Weighted Average Cost of Capital: the WACC formula and the Bluebonnet Industries example (24.4% debt, 75.6% equity, 13.4% cost of equity). https://openstax.org/books/principles-finance/pages/17-3-calculating-the-weighted-average-cost-of-capital (retrieved 2026-10-05)",
    "OpenStax, Principles of Finance, 17.2 The Costs of Debt and Equity Capital: Bluebonnet’s 6.312% yield to maturity, 21% tax rate and 4.986% after-tax cost of debt. https://openstax.org/books/principles-finance/pages/17-2-the-costs-of-debt-and-equity-capital (retrieved 2026-10-05)"
  ],
  "related": [
    "npv",
    "irr",
    "mirr",
    "discount-rate",
    "business-valuation"
  ],
  "changelog": []
}