THE NUMORIX GUIDE
How to use the WACC Calculator
Last reviewed September 14, 2026
What this calculator does
The engine adds equity and debt to total capital, sets equity weight = equity / total and debt weight = debt / total, then applies the tax shield to debt: after-tax debt cost = cost of debt x (1 - tax rate / 100).
Formula and method
The engine adds equity and debt to total capital, sets equity weight = equity / total and debt weight = debt / total, then applies the tax shield to debt: after-tax debt cost = cost of debt x (1 - tax rate / 100). WACC = equity weight x cost of equity + debt weight x after-tax debt cost.
Variables and inputs
Enter equity and debt capital in dollars, cost of equity and cost of debt as annual percent rates, and tax rate as a percent from 0 to 100. The view defaults to $500,000 equity, $300,000 debt, 12% equity cost, 6% debt cost, and 25% tax.
Worked example
With $500,000 equity and $300,000 debt, total capital is $800,000. Weights are 62.5% and 37.5%; after-tax debt cost is 6% x (1 - 0.25) = 4.5%. WACC = 0.625 x 12% + 0.375 x 4.5% = 9.1875%, displayed as 9.19%.
How to interpret the result
WACC is the weighted financing cost for the capital structure represented by the inputs. It can serve as a discount-rate starting point for a comparable-risk project, but it is not automatically the correct rate for every division, investment, or cash flow.
Common mistakes to avoid
Use market-value weights when the analysis calls for them rather than assuming book values are interchangeable. Enter 12 for 12%, not 0.12. Apply the tax rate to debt cost only when the interest tax shield is actually available under the relevant tax rules.
Assumptions and limitations
The engine includes only equity and debt; it omits preferred stock, flotation costs, changing capital structure, distress costs, tax limitations, country risk, and project-specific risk. A zero total-capital input returns an invalid zero result, and the route does not verify whether the entered costs are market-consistent.