WACC, which stands for Weighted Average Cost of Capital, is the way a company can measure how much its capital costs. The WACC indicator is expressed as a percentage and is most often used to assess the attractiveness of an investment.

It is crucial to have some kind of data before calculating the Weighted Average Cost of Capital.

## Data preparation

List the various sources of capital for the company, such as equity, debt, preferred stock, etc. This data would looks something like this:

## Wacc calculations

To calculate the cost of equity, click on B7 (1), type =B4+B5*(B6-B4) (2), and press enter.

If the result is a number, use the format cell to convert it to a percentage.

Click on the cell beside the debt’s expenses (1), and type in =B11*(1-B12) (2), and then press enter.

Click on the cell beside Value (1), and type =E4*E5 (2), to calculate the value on Equity’s amount.

Click on beside the value under the debt’s amount (1), and type in =E11*E12, and then enter.

Click beside Total capital (1) and type in =E6+E13 (2).

Click the cell next to WACC (1), enter =B7*E6/E15+B13*E13/E15, and press enter.

This is how to calculate WACC in Excel. The formula for WACC in Excel is: = SUMPRODUCT(Cost * Weight) / SUM(Weight). You can use this as well.