Learn what Weighted Average Cost of Capital (WACC) is, how to calculate it, and its significance in evaluating investment opportunities.

The WACC takes into account the relative weights of each component of the company’s capital structure, such as debt and equity, to calculate the average cost of capital for the company as a whole.

Esty, Benjamin C., and E. Scott Mayfield. "The Weighted Average Cost of Capital (WACC): Derivation, Intuition, and Applications." Harvard Business School Technical Note 221-106, June 2021.

In this article, we look at why it's so important and how to calculate it. We also look at another key component of the discount cash flow formula, which is the weighted average cost of capital ...