WACC
Computes the weighted average cost of capital from the equity/debt mix, the cost of each, and the tax rate: equity weight times cost of equity, plus debt weight times after-tax cost of debt. All rates go in as decimals, and the cost of debt should be pre-tax; the (1 − TaxRate) shield is applied inside the node. The result is a single rate, ready to wire into a DCF's discount rate.
Inputs
| Input | Accepts | Required |
|---|---|---|
EquityValue | Value (a single number) | Yes |
DebtValue | Value (a single number) | Yes |
CostOfEquity | Value (a single number) | Yes |
CostOfDebt | Value (a single number) | Yes |
TaxRate | Value (a single number) | Yes |
Outputs
| Output | Produces |
|---|---|
Result | Value (a single number) |
Settings
Typed in on the node or set by the assistant, not wired.
| Setting | Default | Notes |
|---|---|---|
EquityValue | 1000 | Market value of equity. Only the ratio to debt matters, so millions or absolute dollars both work. Default 1000. |
DebtValue | 500 | Market value of debt, in the same units as equity. Default 500. |
CostOfEquity | 0.1 | As a decimal: 0.11 for 11%. Default 0.1. |
CostOfDebt | 0.05 | Pre-tax, as a decimal; the node applies the tax shield itself. Default 0.05. |
TaxRate | 0.25 | As a decimal: 0.25 for 25%. Default 0.25. |
Example
A company with $800M of equity and $200M of debt, an 11% cost of equity, a 6% pre-tax cost of debt, and a 25% tax rate: 0.8 × 11% + 0.2 × 6% × 0.75 gives a WACC of 0.097, or 9.7%. Wire the result into DiscountCashFlows and TerminalValue so the whole valuation reprices when any capital-structure assumption moves.
Tips
Put CostOfEquity on a Slider to stress the valuation's most debated input; every downstream present value updates as you drag. A KPICard on the result keeps the working discount rate visible on a dashboard.