WACC builder
A discount rate is an assumption, not a fact. This tool shows every component of the build so you can argue with each one separately. Change any input and everything updates immediately.
Assumptions
Cost of equity
Beta
Capital structure
Share price times diluted shares outstanding.
Book value is an acceptable proxy for most investment grade issuers.
Model
Industry betas from Damodaran, NYU Stern, January 2026. Unlevered and corrected for cash.
WACC
8.26%
Cost of equity
9.04%
Build
| Risk-free rate | 4.25% |
|---|---|
| Unlevered beta | 1.000 |
| Debt / equitymarket value of debt / market value of equity | 0.200 |
| Levered betabetaU x (1 + (1 - t) x D/E) | 1.158 |
| Equity risk premium | 4.14% |
| Size premium | 0.00% |
| Country risk premium | 0.00% |
| Cost of equityrf + betaL x ERP + size + country | 9.04% |
| Pre-tax cost of debt | 5.50% |
| Marginal tax rate | 21.00% |
| After-tax cost of debtpre-tax Kd x (1 - t) | 4.34% |
| Weight of equity | 83.33% |
| Weight of debt | 16.67% |
| WACCWe x Ke + Wd x Kd after tax | 8.26% |
Sensitivity
| Levered beta downEquity risk premium across | 3.64% | 3.89% | 4.14% | 4.39% | 4.64% |
|---|---|---|---|---|---|
| 0.958 | 7.17% | 7.37% | 7.57% | 7.77% | 7.97% |
| 1.058 | 7.48% | 7.70% | 7.92% | 8.14% | 8.36% |
| 1.158 | 7.78% | 8.02% | 8.26% base case | 8.50% | 8.74% |
| 1.258 | 8.08% | 8.34% | 8.61% | 8.87% | 9.13% |
| 1.358 | 8.39% | 8.67% | 8.95% | 9.23% | 9.52% |