The cost of capital represents an investor's required rate of return on an investment and should be a company's minimum acceptable rate of return for anticipated investments. It should be a company's objective to earn rates of return above its cost of capital to maximize its shareholder's investment.
For all numeric values, use integers with decimal places. For example, enter 5.57% as 5.57, not .0557.
To use WACC Calculator:
Select Analysis, then Tools/Calculators, and then WACC.
In Risk Free Rate, enter a rate.
In Equity Beta, enter a value.
In Market Risk Premium, enter a value.
In Cost of Debt (%) enter the pre-tax percentage.
In Marginal Tax Rate (%), enter a percentage.
In Cost of Preferred, enter a value.
Use zero if the company you are analyzing does not have preferred stock.
Select an Enter Leverage As A Function Of option:
Select Equity to base leverage ratio on debt to equity.
Select Total Capital to base leverage ratio on debt to total capital.
In Debt To... Ratio, enter a value to base leverage ratio on Equity or Total Capital.
In Preferred to... Ratio, enter a value to base the leverage ratio on Equity or Total Capital.