After-Tax Weighted Average Cost of Capital (WACC) Calculator
Calculate your after-tax weighted average cost of capital (WACC) to determine the minimum return required on investments. This calculator provides a comprehensive view of your cost of capital by weighting different financing sources and accounting for tax benefits.
Total Market Value
capital structure value
Equity Weight
percentage of total capital
Debt Weight
percentage of total capital
Preferred Stock Weight
percentage of total capital
After-Tax Cost of Debt
debt cost after tax benefits
CAPM Cost of Equity
equity cost using CAPM
Dividend Model Cost of Equity
equity cost using DDM
Weighted Average Cost of Capital (WACC)
overall cost of capital
Equity Component Cost
weighted equity contribution
Debt Component Cost
weighted debt contribution
Preferred Stock Component Cost
weighted preferred contribution
Tax Shield Benefit
tax savings from debt
Unlevered Cost of Capital
cost without tax benefits
WACC Savings from Tax Benefits
tax advantage savings
Hurdle Rate
WACC + risk premium
Break-Even Return
minimum required return
Optimal Debt Ratio
suggested debt percentage
Results calculated based on your inputs
About After-Tax WACC Calculator
The After-Tax Weighted Average Cost of Capital (WACC) Calculator is a fundamental financial tool that determines the minimum return a company must earn on its investments to satisfy its investors and creditors. WACC represents the average cost of all capital sources (debt, equity, and preferred stock) weighted by their relative proportions in the company's capital structure.
Understanding your WACC is crucial for capital budgeting decisions, project evaluation, company valuation, and investment analysis. This calculation accounts for the cost of equity (required return for shareholders), the after-tax cost of debt (interest expense minus tax benefits), and the cost of preferred stock, all weighted by their respective proportions in the capital structure. The after-tax adjustment for debt is particularly important as interest payments are tax-deductible, effectively reducing the cost of debt financing.
This calculator is essential for financial analysts, corporate finance managers, investment professionals, and business owners who need to evaluate investment opportunities, determine hurdle rates for projects, assess company value, and make informed decisions about capital allocation. By understanding the true cost of capital, companies can optimize their capital structure, improve investment returns, and enhance shareholder value through better financial decision-making.