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WACC Calculator

Computes the weighted average cost of capital from the market values and costs of equity, debt and optional preferred stock, applying the corporate tax shield to the cost of debt.

When to use

You need a discount rate for a company's cash flows, or want to see how the debt/equity mix and tax rate change the overall cost of capital.

Do not use when: You only need the cost of equity itself (use capm) or the capital structure changes over the forecast period. Informational only; not financial advice.

Formula

V = equity_value + debt_value + preferred_value; wacc_percent = equity_value/V × cost_of_equity_percent + debt_value/V × cost_of_debt_percent × (1 − tax_rate_percent/100) + preferred_value/V × cost_of_preferred_percent

Standard WACC with market-value weights and the interest tax shield applied to debt only; it assumes the company can use the full deduction and keeps the same capital structure. Informational mathematics only; not financial advice.

Inputs

Parameter	Type	Unit	Required	Description
`equity_value`	number		yes	Market value of equity (share price × shares). Range: ≥ 0, ≤ 1000000000000000
`debt_value`	number		yes	Market (or book) value of interest-bearing debt. Range: ≥ 0, ≤ 1000000000000000
`cost_of_equity_percent`	number	%	yes	Required return on equity in percent (e.g. from CAPM). Range: ≥ 0, ≤ 100
`cost_of_debt_percent`	number	%	yes	Pre-tax interest rate on the debt in percent. Range: ≥ 0, ≤ 100
`tax_rate_percent`	number	%	yes	Marginal corporate tax rate; interest is tax-deductible so debt costs (1 − t) × rate. Range: ≥ 0, ≤ 100
`preferred_value`	number		default 0	Market value of preferred stock, if any. Range: ≥ 0, ≤ 1000000000000000
`cost_of_preferred_percent`	number	%	no	Preferred dividend yield in percent; required when preferred_value > 0. Range: ≥ 0, ≤ 100

Outputs

Output	Type	Unit	Description
`wacc_percent`	number	%	E/V·ke + D/V·kd·(1 − t) + P/V·kp.
`weight_equity_percent`	number	%	E / (E + D + P) × 100.
`weight_debt_percent`	number	%	D / (E + D + P) × 100.
`weight_preferred_percent`	number	%	P / (E + D + P) × 100.
`after_tax_cost_of_debt_percent`	number	%	cost_of_debt × (1 − tax_rate).
`total_capital`	number		E + D + P.

Example

E 600, D 400, ke 10 %, kd 5 %, tax 25 %: {"equity_value":600,"debt_value":400,"cost_of_equity_percent":10,"cost_of_debt_percent":5,"tax_rate_percent":25} → {"wacc_percent":7.5,"weight_equity_percent":60,"weight_debt_percent":40,"after_tax_cost_of_debt_percent":3.75,"total_capital":1000}

E 700, D 300, P 50 at 7 %, ke 9 %, kd 6 %, tax 30 %: {"equity_value":700,"debt_value":300,"cost_of_equity_percent":9,"cost_of_debt_percent":6,"tax_rate_percent":30,"preferred_value":50,"cost_of_preferred_percent":7} → {"wacc_percent":7.53,"weight_equity_percent":66.67,"weight_debt_percent":28.57,"weight_preferred_percent":4.76,"after_tax_cost_of_debt_percent":4.2}

GET https://tttkmbb.com/api/v1/calculate/wacc?equity_value=600&debt_value=400&cost_of_equity_percent=10&cost_of_debt_percent=5&tax_rate_percent=25

Machine access

API: GET https://tttkmbb.com/api/v1/calculate/wacc (query parameters) or POST with a JSON body {"inputs": {...}}
Schema: https://tttkmbb.com/api/v1/calculators/wacc · Markdown: https://tttkmbb.com/investing/wacc.md · JSON definition: https://tttkmbb.com/investing/wacc.json
MCP: server https://tttkmbb.com/mcp, tool run_calculator with calculator_id="wacc"
OpenAPI operationId: calculate_wacc
Freshness: static. Authentication: none. Rate limit: fair use (see rate limits).

Sources

Wikipedia – Weighted average cost of capital (reference)
Wikipedia – Capital asset pricing model (reference)

FAQ

Market or book values for the weights?

Market values are preferred: share price × shares for equity and the traded value of bonds for debt. Book debt is a common approximation when bonds are not traded.

Why is debt cheaper than equity?

Lenders are paid first and interest is tax-deductible, so debt's after-tax cost is lower; adding debt does, however, raise the risk and hence the cost of equity.

Related calculators

CAPM Calculator — Estimate the cost of equity input.
DCF Valuation Calculator — Use the WACC as the discount rate.
NPV Calculator — Appraise a project at the cost of capital.