About the WACC Calculator
What is the WACC Calculator?
The weighted average cost of capital (WACC) is the return a company must earn to satisfy both lenders and shareholders. It is the discount rate in most DCF valuations.
This WACC calculator works out the cost of equity with CAPM from the risk-free rate, beta and equity risk premium, and the after-tax cost of debt, then weights them by market value.
How to use the WACC Calculator
- Market Value of Equity (₹) (sample: 70,00,00,000)
- Market Value of Debt (₹) (sample: 30,00,00,000)
- Risk-Free Rate – 10-year G-Sec yield (%) (sample: 6.4)
- Equity Beta (sample: 1.1)
- Equity Risk Premium (%) (sample: 7)
- Pre-Tax Cost of Debt (%) (sample: 9.5)
- Tax Rate (%) (sample: 25.17)
- Press Calculate WACC (results also refresh as you type). The result card shows the WACC, along with Cost of equity (CAPM), After-tax cost of debt, Equity weight and Debt weight.
Formula used
WACC = E ÷ (D + E) × Ke + D ÷ (D + E) × Kd × (1 − Tax rate)
- Ke (CAPM) = risk-free rate + beta × equity risk premium
- Kd = pre-tax cost of debt
Domestic companies under Section 115BAA have an effective tax rate of 25.17%.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Market Value of Equity (₹) | 70,00,00,000 |
| Market Value of Debt (₹) | 30,00,00,000 |
| Risk-Free Rate – 10-year G-Sec yield (%) | 6.4 |
| Equity Beta | 1.1 |
| Equity Risk Premium (%) | 7 |
| Pre-Tax Cost of Debt (%) | 9.5 |
| Tax Rate (%) | 25.17 |
| Result | Value |
|---|---|
| WACC | 12% |
| Cost of equity (CAPM) | 14.1% |
| After-tax cost of debt | 7.11% |
| Equity weight | 70% |
| Debt weight | 30% |
Tips for using the WACC Calculator
- Use the 10-year government bond yield (about 6.3–6.6% in 2025) as the risk-free rate.
- Equity risk premiums for India are usually taken at 6–8%.