Wacc Weighted Average Cost of Capital

WACC Weighted Average Cost of Capital Formula
The WACC Weighted Average Cost of Capital formula is complex, and can be broken into several components. The individual component costs are provided in the following sections.

WACC Weighted Average Cost of Capital Variables
V=Firm Total Value (Debt + Preferred Shares + Common Equity + Retained Earnings)
Md=Market Value of Debt
Mp=Market Value of Preferred Shares
Mc=Market Value of Common Equity
Mr=Market Value of Retained Earnings
K=Current Market Interest Rate
T=Tax Rate
Dp=Annual Dividends for Preferred Shares
Pp=Market Price of Preferred Shares
Fp=Floatation Costs of Preferred Shares
Dc=Annual Dividends for Common Shares
Pc=Market Price of Common Shares
Fc=Floatation Costs of Common Shares
G=Constant Growth Rate of Common Share Dividends Cost of Debt Formula
Cost of Debt is the cost to the company for the use of borrowed funds to finance operations.
K=Current Market Interest Rate
T=Tax Rate
Cost of debt = k(1-T) Cost of Preferred Shares Formula
Cost of Preferred Shares is the cost to the company for the use of funds generated by selling preferred shares to investors.

D=Annual Dividends
P=Market Price of Shares
F=Floatation Costs
Cost of preferred shared = D/ (1-f)P

Cost of Common Shares Formula
Cost of Common Shares is the cost to the company for the use of funds generated by issuing common shares to investors.
D=Annual Dividends
P=Market Price of Shares
F=Floatation Costs
G=Constant Growth Rate of Dividends
Cost of common shares = D(1+g) / (1-f)P = +G Cost of Retained Earnings Formula
Cost of Retained Earnings is the cost to the company for the use of funds retained from previous profits.
D=Annual Dividends
P=Market Price of Common Shares
G=Constant Growth Rate of Dividends
Cost of retained earnings = D( 1+g) /P = +g How to use the WACC Weighted Average Cost of Capital calculator?
In order to use the WACC Weighted Average Cost of Capital