Accounting Share · Interest, loans & valuation
Weighted Average Cost of Capital Calculator
Blend equity and after-tax debt costs using their market-value weights in a simplified two-source capital structure.
The interactive calculator requires JavaScript. The formula and worked example below remain available.
01 / Enter your figures
Make the numbers yours.
Use one currency and consistent time periods. Amounts are shown in your input currency units; no currency conversion is performed.
02 / See the working
Your calculation
Enter your figures, then choose Calculate. Or load the worked example.
03 / Understand the method
Formula and method
WACC = Equity weight × Cost of equity + Debt weight × Cost of debt × (1 − Tax rate)
Blend equity and after-tax debt costs using their market-value weights in a simplified two-source capital structure.
How to use this calculator
- Collect the figures for the same entity, currency and reporting period.
- Enter each input using its label and unit. For percentages, enter 15 to mean 15%.
- Choose Calculate, inspect the breakdown and compare the result with your assumptions.
- Change one input to explore a scenario. Recalculate after edits; display rounding does not round the underlying calculation.
Inputs at a glance
- Market value of equity: A nonnegative numeric input in the units specified by the label.
- Market value of debt: A nonnegative numeric input in the units specified by the label.
- Cost of equity (%): A percentage number rather than a decimal fraction.
- Pre-tax cost of debt (%): A percentage number rather than a decimal fraction.
- Applicable interest tax-shield rate (%): A percentage number rather than a decimal fraction.
Worked example
Follow one calculation.
- Market value of equity
- 600000
- Market value of debt
- 400000
- Cost of equity (%)
- 12
- Pre-tax cost of debt (%)
- 6
- Applicable interest tax-shield rate (%)
- 25
- Calculated result
- 9%
Load this example in the interactive form to inspect the intermediate amounts.
Assumptions and interpretation
Assumes the tax shield is available and the target financing and risk are appropriate. Preferred shares, leases and other financing may require separate components.
The output is a model based on the figures entered. Check source records and use the accounting or contractual definitions relevant to your task before relying on a result.
Questions about this tool
What does the weighted average cost of capital calculation measure?
Blend equity and after-tax debt costs using their market-value weights in a simplified two-source capital structure.
Which assumptions can change the result?
Assumes the tax shield is available and the target financing and risk are appropriate. Preferred shares, leases and other financing may require separate components.
Why can displayed totals differ slightly from my spreadsheet?
Calculations use the unrounded input values. Only the display is rounded. Use four or six decimal places to inspect small differences, and check the timing, sign conventions and rounding policy in your spreadsheet.
Reference and further learning
Time value of money and loans. These original learning examples apply the displayed formula; the reference does not certify or endorse this calculator.
Look up an accounting term · Practise with accounting questions
Formula and worked example checked 4 November 2026. Calculations run in your browser without sending the entered figures to Accounting Share. Report a calculation issue with the tool name, example inputs and expected result; avoid sharing confidential records.
