Calculate weighted average cost of capital (WACC) from the market value of equity, market value of debt, cost of equity, cost of debt, and tax rate.
Often the market capitalization for a public company, or a reasonable estimate for a private one.
Use market value of outstanding debt, or book value as a close estimate.
The required return equity investors expect, often estimated with a model like CAPM.
The average interest rate the company pays on its outstanding debt, before tax.
The company's effective tax rate, used to apply the debt tax shield.
This estimate assumes the market values, cost figures, and tax rate you enter stay steady for the period being analyzed.
Powered by CalcTide