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Weighted Average Cost of Capital (WACC) blends debt and equity costs based on capital structure weights; company hurdle rate for investments.

सूत्र

Calculate WACC = (E/V)×r_e + (D/V)×r_d×(1-Tc)
E
E value — Variable used in the calculation
V
V value — Variable used in the calculation
D
D value — Variable used in the calculation
Tc
Tc value — Variable used in the calculation

चरण-दर-चरण मार्गदर्शिका

  1. 1Input debt weight/cost, equity weight/cost (from CAPM)
  2. 2Calculate WACC = (E/V)×r_e + (D/V)×r_d×(1-Tc)
  3. 3Use as discount rate for DCF

हल किए गए उदाहरण

इनपुट
60% equity at 10%, 40% debt at 5%, 25% tax rate
परिणाम
WACC ≈ 7.4% (blended cost)
Most companies use 8-10%

सामान्य गलतियां जिनसे बचना है

  • Using market values instead of targets
  • Neglecting tax effects on debt

अक्सर पूछे जाने वाले प्रश्न

Why multiply debt cost by (1-T)?

Tax deductibility of interest reduces effective debt cost.

सेटिंग्स