Cost of Capital Calculator

The Cost of Capital, also called weighted average cost of capital (WACC), for small business owners and entrepreneurs refers to the expense incurred in obtaining the necessary funds to start, operate, or expand a business. It is a critical financial concept that plays a pivotal role in decision-making processes for business owners, as it directly impacts the profitability and sustainability of their ventures.

To effectively utilize our calculator, input your company’s financial data including the value of equity, value of debt, cost of equity, cost of debt, and expected tax rate. All percentages should be entered without the percent sign. Once all the data is entered, click the Calculate WACC button to see your business’ weighted average cost of capital.

In addition to the cost of capital at the parameters you’ve entered, our calculator generates two sensitivity tables detailing how the WACC for your business moves with changes in capital structure (the percent of your business made up of equity and debt) or changes in the cost of debt and the cost of equity. The sensitivity tables will help you understand an optimal capital structure, or project funding structure so you can make better investment and financing decisions.

Utilize this calculator in conjunction with our other free financial calculators to get a full understanding of your prospective business investments and strategies.