How to compute the weighted average cost of capital (WACC)

1. Equity and debt values

   "Equity value" is the market value of equity (market cap for public companies; fair value estimate for private). "Debt value" is the value of interest-bearing debt — book if you don't have market debt prices.

2. Cost of equity and pre-tax debt

   "Cost of equity %" is the required return on equity (CAPM or comparable). "Cost of debt % (pre-tax)" is the all-in yield on the debt before any tax shield.

3. Tax rate

   "Tax rate %" is the marginal corporate tax rate. The formula applies the (1 − tc) shield only to debt — equity is already after-tax in the cost-of-equity figure.

4. Press Run

   Result is waccPercent = (E/V × re) + (D/V × rd × (1 − tc)) × 100, rounded to 4 decimals. Total V = E + D = 0 throws "Total value cannot be 0." — there's nothing to weight.