Excel Template: WACC Calculator

In this post I am going go over WACC calculation and share with you a spreadsheet template I created to calculate WACC for a firm with given information.

WACC in other words, weighted average cost of capital. Or cost of capital in terms of weighted average calculation. Companies use debt or issue preferred stocks as a mean of generating capital for operations. WACC take into account the portions of these debt and equity financing and calculate the interest rate the company have to pay for every dollar it uses for financing activities.

This is also the rate company use as required rate of return in project management, capital budgeting, project evaluation, NPV calculations etc.

Investopedia.com says: "A calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation"

Here is a screen shot of the WACC calculator I designed.

You can download this spreadsheet free of charge and use it to calculate your required rate of return. (WACC calculator is copy right material of ashPresentom)