WACC Calculator

How this works

Cost of equity (Re) = Rf + β × ERP. The Capital Asset Pricing Model. β captures how much the stock moves with the market; ERP is the extra return investors demand for taking equity risk over treasuries.

After-tax cost of debt (Rd) = pre-tax rate × (1 − tax rate). Interest is tax-deductible, so debt financing has a built-in tax shield.

WACC = (E ÷ V) × Re + (D ÷ V) × Rd, where V = E + D. Weight each cost by its share of total capital.

Typical ranges: large-cap tech 8–12%, defensive consumer 6–9%, levered cyclicals 10–14%, biotech 12–16%. If your number is outside its typical range for the sector, double-check beta and capital structure.

Use this for: the discount rate in your DCF (see DCF calculator), measuring whether ROIC > WACC (value creation), and computing economic profit (NOPAT − WACC × invested capital).