WACC (Weighted Average Cost of Capital) is the average rate a company is expected to pay to finance its assets, weighted by the proportion of equity and debt in its capital structure. Used as the discount rate in NPV analysis.
WACC = (E/V × Ke) + (D/V × Kd × (1−T))
E = equity, D = debt, Ke = cost of equity, Kd = cost of debt
For small businesses without complex capital structures, WACC is often approximated as the required rate of return: 8–15% for medium-risk projects.
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Use the ROI/NPV/IRR calculator.