WACC calculator
With 60% equity at 12%, 40% debt at 6% and a 25% tax rate, the weighted average cost of capital is 9%. You also see the after-tax cost of debt and what each source adds. Free in your browser.
- Free
- Runs in your browser
- No sign-up
- Your data stays on your device
Run — free
Worked example
- Cost of equity percent
- 12
- Equity weight percent
- 60
- Cost of debt percent
- 6
- Debt weight percent
- 40
- Tax rate percent
- 25
- After tax cost of debt percent
- 4.5
- Equity contribution percent
- 7.2
- Debt contribution percent
- 1.8
- Wacc percent
- 9
The weighted average cost of capital is the blended required return a firm pays its equity and debt investors after the interest tax shield. Analysts, students, and product teams need a fast, deterministic WACC from cost of equity, equity weight, pre-tax cost of debt, debt weight, and corporate tax rate without opening a spreadsheet model. This weighted average cost of capital calculator applies the classic two-source formula WACC equals equity weight times cost of equity plus debt weight times cost of debt times one minus tax rate, returns the overall WACC percent together with after-tax cost of debt and each capital-structure contribution, and fails clearly when inputs are missing, non-finite, negative where not allowed, tax rate outside zero to one hundred exclusive, or equity and debt weights that do not sum to one hundred percent.
What WACC means and why the tax shield appears
Weighted average cost of capital answers a deceptively simple question: for a firm financed with a mix of equity and interest-bearing debt, what single discount rate fairly blends the return equity holders require with the after-tax cost of borrowing? Equity is residual and usually more expensive; debt is contractually cheaper and its interest is typically tax-deductible, so the true economic cost of debt is the pre-tax yield times one minus the corporate tax rate.
The classical textbook identity therefore weights cost of equity by the equity share of total capital and weights after-tax cost of debt by the debt share: WACC equals (E over V) times Re plus (D over V) times Rd times (one minus Tc), where V is E plus D.
If a company is sixty percent equity at a twelve percent cost of equity and forty percent debt at a six percent pre-tax cost of debt with a twenty-five percent tax rate, after-tax debt cost is four point five percent, the equity slice contributes seven point two percentage points, the debt slice contributes one point eight, and WACC is nine percent. That nine percent is the hurdle often used to discount free cash flows in DCF valuation when capital structure is assumed stable.
This calculator does not estimate beta, CAPM equity premium, or bond yields from market prices; you supply the costs and weights you already trust, and it blends them with the tax adjustment so every consumer sees the same arithmetic.
What you can do with it
Classroom and exam checks
Verify textbook WACC for given equity and debt costs, percent weights that sum to 100, and corporate tax rate, including the after-tax debt contribution.
DCF hurdle rate updates
Recompute WACC when leverage or tax assumptions change so free-cash-flow models use a consistent discount rate without rebuilding the blend by hand.
Product and onboarding widgets
Show founders and students the blended cost of capital next to quoted costs and capital-structure weights on calculator or education pages.
FAQ
What units should I use?
All rates and weights are percents: 12 means 12% cost of equity, 60 means 60% equity weight, 25 means 25% tax rate. Do not send decimal fractions such as 0.12 for cost of equity.
Does this include preferred stock or CAPM?
No. This capability blends only equity and interest-bearing debt with a tax shield. Estimating Re from beta or adding preferred stock is out of scope.
Why is the cost of debt reduced by the tax rate?
Because interest on debt is usually tax-deductible, so borrowing really costs the pre-tax yield times one minus the tax rate. At 6% and a 25% tax rate, the after-tax cost of debt is 4.5%.
What if my equity and debt weights don't add up to 100%?
The calculation is refused. The two weights must describe the whole capital structure, so the equity and debt shares have to total 100%. Adjust them, for example to 60 and 40, before you run it.
What is WACC used for?
It is the single discount rate that blends what shareholders and lenders require. In a discounted cash flow valuation it often serves as the hurdle rate for future cash flows when the capital structure is assumed to stay stable.
Related tools
For developers — API access
Everything on this page is available programmatically. This section is for teams who want to wire it into their own systems; everyone else can just use the tool above.
API endpoint
Prefer to automate it? One authenticated POST creates the task; the result comes back by webhook or a signed link. The same capability also runs here on the web, by email and from Telegram — and soon from our app too.
Call it from your stack
curl -X POST https://api.kit.forhosting.com/finance/wacc \
-H "Authorization: Bearer $KIT_KEY" \
-H "Content-Type: application/json" \
-d '{"cost_of_equity_percent":12,"equity_weight_percent":60,"cost_of_debt_percent":6,"debt_weight_percent":40,"tax_rate_percent":25}'const res = await fetch("https://api.kit.forhosting.com/finance/wacc", {
method: "POST",
headers: {
"Authorization": `Bearer ${process.env.KIT_KEY}`,
"Content-Type": "application/json"
},
body: JSON.stringify({
"cost_of_equity_percent": 12,
"equity_weight_percent": 60,
"cost_of_debt_percent": 6,
"debt_weight_percent": 40,
"tax_rate_percent": 25
})
});
const { task_id } = await res.json();import os, requests
res = requests.post(
"https://api.kit.forhosting.com/finance/wacc",
headers={"Authorization": f"Bearer {os.environ['KIT_KEY']}"},
json={
"cost_of_equity_percent": 12,
"equity_weight_percent": 60,
"cost_of_debt_percent": 6,
"debt_weight_percent": 40,
"tax_rate_percent": 25
},
)
task_id = res.json()["task_id"]<?php
$res = file_get_contents("https://api.kit.forhosting.com/finance/wacc", false, stream_context_create([
"http" => [
"method" => "POST",
"header" => "Authorization: Bearer " . getenv("KIT_KEY") . "\r\nContent-Type: application/json",
"content" => '{"cost_of_equity_percent":12,"equity_weight_percent":60,"cost_of_debt_percent":6,"debt_weight_percent":40,"tax_rate_percent":25}',
],
]));
$task = json_decode($res, true);body := bytes.NewBufferString(`{"cost_of_equity_percent":12,"equity_weight_percent":60,"cost_of_debt_percent":6,"debt_weight_percent":40,"tax_rate_percent":25}`)
req, _ := http.NewRequest("POST", "https://api.kit.forhosting.com/finance/wacc", body)
req.Header.Set("Authorization", "Bearer "+os.Getenv("KIT_KEY"))
req.Header.Set("Content-Type", "application/json")
res, _ := http.DefaultClient.Do(req)Example request
{
"cost_of_equity_percent": 12,
"equity_weight_percent": 60,
"cost_of_debt_percent": 6,
"debt_weight_percent": 40,
"tax_rate_percent": 25
}Example response
{
"task_id": "tsk_a1b2c3d4e5f6a1b2c3d4e5f6",
"type": "finance.wacc",
"status": "queued",
"_links": {
"result": "/tasks/tsk_…/result"
}
}The API is asynchronous: the call returns a task_id immediately and the result arrives by webhook. Polling is capped at 1 req/s per task.
Pricing
Published price — no tokens, no invented credits. A failed task is never charged.
Errors
| HTTP | Code | Meaning |
|---|---|---|
401 | unauthorized | Missing or invalid API key. |
402 | insufficient_balance | Your balance doesn't cover the task price. |
404 | unknown_type | That task type doesn't exist. |
429 | rate_limited | Too many requests. Use the webhook instead of polling. |
Technical notes
Input contract, formula, and response fields
Optionally set decimals to an integer from zero to eight for percentage-style rounding of outputs; the default is four. Money-like percentage fields use half-up rounding once from the raw floating-point results so goldens stay byte-stable across runtimes. POST a JSON body with five required finite numbers, all expressed as percents rather than decimals: cost_of_equity_percent greater than or equal to zero (twelve means twelve percent per year for equity), equity_weight_percent greater than or equal to zero as the equity share of total capital, cost_of_debt_percent greater than or equal to zero as the pre-tax debt yield, debt_weight_percent greater than or equal to zero as the debt share, and tax_rate_percent in the half-open interval from zero inclusive to one hundred exclusive (twenty-five means a twenty-five percent corporate tax rate; one hundred would zero the after-tax debt term via a degenerate shield and is rejected). Equity weight plus debt weight must equal one hundred within a tiny absolute tolerance so that E over V and D over V form a complete capital structure; other mixes fail with invalid_input naming the weight sum. Internally the engine forms We and Wd as weights over one hundred and Tc as tax rate over one hundred, then computes after-tax cost of debt as Rd times one minus Tc, equity contribution as We times Re, debt contribution as Wd times after-tax debt cost, and wacc_percent as the sum of the two contributions. The response echoes every input, returns after_tax_cost_of_debt_percent, equity_contribution_percent, debt_contribution_percent, wacc_percent, and a short formula string. Missing fields, empty strings, non-finite values, negative costs or weights, tax rate outside the allowed range, out-of-range decimals, and weights that do not sum to one hundred fail with invalid_input and are not billed.
Where a WACC calculator earns its keep
Product landing pages that rank for weighted average cost of capital calculator benefit from a free browser path that matches the paid automation path on the same pure module. Interview screens and homework generators require a deterministic oracle that rejects impossible tax rates and non-summing weights instead of returning NaN. Use it when the question is the classical WACC from known costs and weights, and layer richer capital-structure analytics in your own service when you need them. Investment banking and FP&A templates often recompute WACC when leverage or statutory tax assumptions change mid-model; a tiny parse API avoids reinventing the blend in every spreadsheet. Sweep cost of debt or equity weight in a loop from your own code to show how WACC moves with leverage; pin wacc_percent in tests; keep requests small. This tool does not produce unlevered or relevered betas, target versus current capital structure optimization, preferred stock as a third capital source, or country-risk premia—only the standard two-source after-tax weighted average.
Technical questions
How is WACC calculated?
WACC = (equity_weight/100)×cost_of_equity + (debt_weight/100)×cost_of_debt×(1 − tax_rate/100). All inputs are percents. The API also returns after-tax cost of debt and each contribution in percentage points.
Must equity and debt weights sum to 100?
Yes. equity_weight_percent plus debt_weight_percent must equal 100 (within a tiny floating tolerance). Other mixes fail with invalid_input so incomplete capital structures are never silently normalized.
What does the weighted average cost of capital calculator cost?
The browser tool is free. API requests use prepaid KIT balance at $0.002 per successful call; invalid input is not billed.