WACC Calculator (Weighted Average Cost of Capital)
This advanced WACC calculator supports multiple industry-standard methods: market-value vs book-value weightings, CAPM-based cost of equity, net vs gross debt treatment, and an adjustable private-company premium. Use the method selector to choose the approach that matches your appraisal or valuation process.
Results are numeric estimates based on user inputs. Inputs expressed as percentages should be entered as percent values (for example, enter 6 for 6%). The calculator converts percentage inputs internally to decimals when computing WACC.
Uses market capitalization for equity and net debt (debt minus cash). Cost of equity is estimated by CAPM using user inputs for risk-free rate, beta, and equity risk premium.
Inputs
Advanced inputs
Book-value inputs
Results
WACC (%)
774.17%
Cost of equity (CAPM) (%)
8.50%
After-tax cost of debt (%)
3.95%
Equity weight (%)
83.33%
Debt weight (%)
16.67%
| Output | Value | Unit |
|---|---|---|
| WACC (%) | 774.17% | % |
| Cost of equity (CAPM) (%) | 8.50% | % |
| After-tax cost of debt (%) | 3.95% | % |
| Equity weight (%) | 83.33% | % |
| Debt weight (%) | 16.67% | % |
Visualization
Methodology
Weights: either market-value weights (equity market capitalization and debt) or book-value weights (accounting figures). Net debt = total debt minus cash when net-debt mode is selected.
Cost of equity (CAPM): cost_of_equity = risk-free rate + beta × equity risk premium. For private companies, an additive premium may be applied to CAPM to reflect size, illiquidity, and control considerations.
Cost of debt: use pre-tax cost of debt and apply the tax shield by multiplying by (1 - tax rate). WACC is the weighted sum of the equity and after-tax debt costs.
Worked examples
Example 1 (public company, market-value, net debt): market cap 100m, net debt 10m, cost of equity 8%, pre-tax cost of debt 4%, tax 21% → compute weights and apply formula to get WACC.
Example 2 (private company): apply a private-company premium (e.g., 2%) to CAPM cost of equity to reflect higher expected return requirements; recompute WACC using the adjusted cost of equity.
Further resources
Expert Q&A
Should I use market values or book values for weights?
Market values are preferred for valuations because they reflect current investor expectations. Book values may be used for accounting or regulatory contexts. Choose the approach consistent with your valuation purpose.
How should I input percentages?
Enter percentage inputs as whole numbers (for example, enter 6 for 6%). The calculator converts these to decimal fractions internally when computing.
Does this tool compute CAPM automatically?
Yes. When using CAPM methods, provide the risk-free rate, beta, and equity risk premium. The tool computes cost of equity = risk-free rate + beta × equity risk premium.
Are the results authoritative tax or accounting advice?
No. Calculations are estimates to support analysis and decision-making. Consult tax, accounting, or legal professionals for authoritative guidance. See the accuracy and compliance notes.
What are the limitations and accuracy considerations?
Outputs depend entirely on input accuracy and method selection. Model assumptions (e.g., CAPM validity, choice of ERP, beta adjustments) materially affect results. Rounding, data quality, and method selection introduce additional uncertainty. Use sensitivity checks and scenario analysis to validate results.
How should I treat private-company adjustments?
Private-company premiums are judgmental and vary by industry, size, and liquidity. Use market comparables, documented studies, or professional appraisal guidance when selecting a premium and disclose assumptions.
How are tax shields treated?
This calculator applies the corporate tax rate to the cost of debt to reflect the tax shield: after-tax cost of debt = pre-tax cost of debt × (1 - tax rate). Confirm the applicable tax rate for the entity and jurisdiction.
Sources & citations
- NIST — Framework and software assurance guidance — https://www.nist.gov
- ISO 31000 — Risk management — https://www.iso.org/iso-31000-risk-management.html
- IEEE — Software and systems engineering standards — https://www.ieee.org
- OSHA — Workplace safety standards (engineering governance reference) — https://www.osha.gov
- U.S. SEC — Guidance on valuation and disclosures — https://www.sec.gov