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 average to satisfy its entire security proprietors to finance its assets. Weighted average cost of capital 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), Firm Value (V_{Firm}), Cost of Equity (Re), Market Value of the Firm’s Debt (MV), Cost of Debt (Rd) & 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)).