What is the weighted average cost of capital?
WACC represents the average rate a company is expected to pay to finance its assets, blending the cost of equity and the after-tax cost of debt, weighted by how much of each the company uses. It’s commonly used as a discount rate in valuation.
The formula
WACC = (E/V) × Re + (D/V) × Rd × (1 – Tax Rate), where E is market value of equity, D is market value of debt, V is total value (E+D), Re is cost of equity, and Rd is cost of debt. Debt’s cost is reduced by the tax shield since interest is often tax-deductible.
This calculator is for general financial education and analysis purposes.
Last reviewed August 2026