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WACC Calculator

Free weighted average cost of capital calculator. Cost of equity (CAPM), after-tax cost of debt, and WACC from Damodaran, Fernandez, and Kroll data.

Report

Company name and as-of date appear on the printed calculation.

Optional. Used as the title of the printed report.

Reference date of the inputs used in this calculation.

Geography

Tax country follows the selected country unless you override it.

Determines risk-free rate and market risk premium (Fernandez, 2025)

Determines the marginal tax rate for cost of debt calculation (Damodaran, January 2026)

Industry and size

Sector sets the unlevered beta. Size sets the size premium.

Determines the unlevered beta for the calculation (Damodaran, January 2026, Global Betas)

Company size in millions of USD determines the size premium (Kroll, 2025)

Interest Coverage Ratio

Sets the debt spread. Damodaran, 2026
Current ICR3.33

Earnings Before Interest and Taxes

Annual interest payment

Determines debt rating thresholds

Capital Structure

Drag to set the equity share. Debt is the remainder so the two always sum to 100%.

40%

Debt

60%

Cost of Equity

CAPM inputs. Choose which beta you set; the other is derived from capital structure and tax.

Rate of return on a default-free investment in the same currency and time horizon (Fernandez, 2025)

Excess return of the market over the risk-free rate (Fernandez, 2025)

Beta

Choose which beta you set. The other is derived from capital structure and tax.

Input

Business risk without financial leverage effect (Damodaran, January 2026)

Calculated

Sensitivity including financial leverage effect. βL = βU × [1 + (1 − Tax Rate) × (Debt ÷ Equity)] (Hamada, 1972)

Additional premium based on company size (Kroll, 2025)

Company-specific or other additional risk factors

Cost of Debt

Pre-tax cost of debt and the tax shield on interest.

Country-specific base rate for debt calculations (Fernandez, 2025)

Additional yield over the risk-free rate (Damodaran, January 2026)

Marginal tax rate for the jurisdiction (Damodaran, January 2026)

Results

WACC

10.19%

ke

19.91%

kd

4.99%

after tax 3.71%

WACC

  • Equity 40% 7.96%
  • Debt after tax 60% 2.23%

40.00% × 19.91% + 60.00% × 4.99% × (1 − 25.63%) = 7.96% + 2.23% = 10.19%

Cost of equity (ke)

  • Risk-free 4.10%
  • βL × MRP 15.07%
  • Size 74.00%
  • Additional 0.00%

βL = 1.30 × [1 + (1 − 25.63%) × (60 ÷ 40)] = 2.74 · ke = 4.10% + 2.74 × 5.50% + 0.74% + 0.00% = 19.91%

Cost of debt (kd)

  • Risk-free 4.10%
  • Spread 89.00%

4.10% + 0.89% = 4.99%

WACC

10.19%

ke

19.91%

kd

4.99%

How this WACC calculator works

Read the WACC guide

Weighted average cost of capital blends the return equity investors require with the after-tax cost of debt. Use it as the discount rate in a DCF or as the hurdle rate for project NPV.

Cost of equity (CAPM)

Risk-free rate, levered beta, market risk premium, Kroll size premium, and company-specific risk.

Cost of debt

Credit spread from interest coverage, then after-tax kd because interest is tax-deductible.

Country and sector data

Fernandez country premiums, Damodaran sector betas and tax rates, updated for 2025–2026.

Related guides

WACC guide

Formula, CAPM, levered beta, cost of debt, and the data behind the calculator.

WACC vs cost of equity

The difference in plain terms, when to use each rate, and a worked example.

Damodaran WACC calculator

How sector betas, country tax rates, and default spreads enter the model.

WACC calculator FAQ

What is WACC?

WACC (Weighted Average Cost of Capital) is the blended return a company must earn to satisfy equity and debt investors. It is the hurdle rate for capital budgeting and the discount rate in many DCF valuations.

How do you calculate WACC?

WACC = (E / (E + D)) × ke + (D / (E + D)) × kd × (1 − T). Equity and debt are market values, ke is the cost of equity, kd is the cost of debt, and T is the corporate tax rate.

How is cost of equity calculated?

This calculator uses CAPM: ke = rf + βL × MRP + size premium + additional risk. The risk-free rate and market risk premium come from Fernandez country surveys; beta is levered from Damodaran sector unlevered betas.

Why is the cost of debt after tax?

Interest is tax-deductible in most jurisdictions, so WACC uses kd × (1 − T). The pre-tax cost of debt is the risk-free rate plus a credit spread implied by the interest coverage ratio.

Which data sources does the calculator use?

Fernandez 2025 (and 2024 where needed) for risk-free rates and market risk premiums, Damodaran 2026 for global sector betas, country tax rates, and default spreads, and Kroll 2025 for size premiums.