In general, the WACC can be calculated with the following formula:[3]

where is the number of sources of capital (securities, types of liabilities); is the

required rate of return for security ; and is the market value of all outstanding

securities .
In the case where the company is financed with only equity and debt, the average cost of capital
is computed as follows:

where is the total debt, is the total shareholder's equity, is the cost of debt,

and is the cost of equity. The market values of debt and equity should be used when
computing the weights in the WACC formula.[4]