The following is the WACC calculation formula. How to Calculate WACC WACC is calculated by multiplying the cost of each capital source debt and equity by its relevant weight and then adding the products together to determine the value. This metric is what we refer to as the weighted average cost of capital or WACC.
Rd Cost of debt.
T Tax rate. The companys CEO has stated that if the company increases the amount of long term debt so the capital structure will be 60 debt and 40 equity this will lower its WACC. Use this online calculator to easily calculate the Weighted Average Cost of Capital WACC of a capital raise based on the cost of equity cost of debt and the corporate tax rate. WACC Calculation Starbucks Example.