### Weighted Average Cost of Capital Formula

Weighted average cost of capital =((Market value of the firm’s equity/Firm Value)*Cost of Equity)+(((Market value of the firm’s debt/Firm Value)*Cost of Debt)*(1-Corporate Tax Rate))
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## How to Calculate Weighted Average Cost of Capital?

Weighted Average Cost of Capital calculator uses Weighted average cost of capital =((Market value of the firm’s equity/Firm Value)*Cost of Equity)+(((Market value of the firm’s debt/Firm Value)*Cost of Debt)*(1-Corporate Tax Rate)) to calculate the Weighted average cost of capital , The weighted average cost of capital (WACC) is the minimum return that a company is supposed to give on an average to satisfy its entire security proprietors to finance its assets. Weighted average cost of capital and is denoted by WACC symbol.

How to calculate Weighted Average Cost of Capital using this online calculator? To use this online calculator for Weighted Average Cost of Capital, enter Market value of the firm’s equity (E), Market value of the firm’s debt (D), Firm Value (V), Cost of Equity (Re), Cost of Debt (Rd) and Corporate Tax Rate (Tc) and hit the calculate button. Here is how the Weighted Average Cost of Capital calculation can be explained with given input values -> -160 = ((500/500000)*200000)+(((2000/500000)*10000)*(1-10)).

### FAQ

What is Weighted Average Cost of Capital?
The weighted average cost of capital (WACC) is the minimum return that a company is supposed to give on an average to satisfy its entire security proprietors to finance its assets and is represented as WACC=((E/V)*Re)+(((D/V)*Rd)*(1-Tc)) or Weighted average cost of capital =((Market value of the firm’s equity/Firm Value)*Cost of Equity)+(((Market value of the firm’s debt/Firm Value)*Cost of Debt)*(1-Corporate Tax Rate)). The market value of equity is the total dollar market value of all of a company's outstanding shares, The market value of debt is the total dollar debt value of all of a firm such as bonds and loans, Firm Value is a measure of a company's total value, often used as a more comprehensive alternative to equity market capitalization. , The cost of equity is the return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital, The cost of debt is the interest a company pays on its borrowings and The corporate tax rate is the rate at which levy is placed on the profit of a firm to raise taxes.
How to calculate Weighted Average Cost of Capital?
The weighted average cost of capital (WACC) is the minimum return that a company is supposed to give on an average to satisfy its entire security proprietors to finance its assets is calculated using Weighted average cost of capital =((Market value of the firm’s equity/Firm Value)*Cost of Equity)+(((Market value of the firm’s debt/Firm Value)*Cost of Debt)*(1-Corporate Tax Rate)). To calculate Weighted Average Cost of Capital, you need Market value of the firm’s equity (E), Market value of the firm’s debt (D), Firm Value (V), Cost of Equity (Re), Cost of Debt (Rd) and Corporate Tax Rate (Tc). With our tool, you need to enter the respective value for Market value of the firm’s equity, Market value of the firm’s debt, Firm Value, Cost of Equity, Cost of Debt and Corporate Tax Rate and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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