WACC (Weighted Average Cost of Capital) Excel calculator
  • WACC (Weighted Average Cost of Capital) Excel calculator
  • WACC (Weighted Average Cost of Capital) Excel calculator
Originally published: 17/12/2018 16:02
Last version published: 27/03/2019 07:32
Publication number: ELQ-21005-3
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WACC (Weighted Average Cost of Capital) Excel calculator

The calculator uses the following basic formula to calculate WACC (Weighted Average Cost of Capital).

Description
This Weighted Average Cost of Capital (WACC) model by Bolortseren is an Excel template.

WACC Definition

In finance, The weighted average cost of capital, or WACC, is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is the minimum acceptable return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere.

WACC Calculator

The calculator uses the following basic formula to calculate the WACC:
WACC = (E / V) × Re + (D / V) × Rd × (1 − Tc)

Where:
WACC is the weighted average cost of capital,
Re is the cost of equity,
Rd is the cost of debt,
E is the market value of the company's equity,
D is the market value of the company's debt,
V = E + D is the total market value of the company's financing (equity and debt),
E/V is the percentage of equity financing,
D/V is the percentage of debt financing,
Tc is the corporate tax rate

WACC is the weighted average of cost of a company’s debt and the cost of its equity. Weighted Average Cost of Capital analysis assumes that capital markets (both debt and equity) in any given industry require returns commensurate with perceived riskiness of their investments. But does WACC help the investors decide whether to invest into a company or not?

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1 Excel Sheet

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