WACC Calculator / Discount Rate Estimation

WACC Calculator

Weight Cost of Equity Cost of Debt

Equity 1) 70.00% Risk free interest rate 2) 2.00%

Column D Debt 30.00%
14.00%
Total 100.00% Beta (unlevered) 3) 1.00
Wacc 9.93% Beta (levered) 4) 1.43
Cost of Equity 12.57%
12.00%
Cost of Debt 3.75% Market Risk Premium USA 5) 6.00%
Country Spread 6) 0.00% Risk free interest rate 2.00%
Market Risk Premium 6.00% Debt risk premium 8) 3.00%
10.00% Equity Risk Premium 8.57% Pre-tax cost of debt 5.00%

Other premium 7) 2.00% Tax rate 25.00%

8.00%
Weighted Average Cost of Capital Cost of Equity 12.57% Cost of Debt (after tax) 3.75%

12.57%
6.00%
WACC 9.93% 70.00% 30.00%
9.93%
Sources
4.00% 1) Targeted relationship between equity and debt financing
2) Long-term government bond yield
3) Unlevered beta as per applicable industry
2.00% 3.75% 4) As per simple Harris Pringle Formula Beta = Unlevered Beta * (1 + Debt / Equity ratio)
5) Market Risk Premium USA (e.g. 5% - 7% for USA)
6) Adjustment Factor as per country risk premium of target company
0.00% 7) Small cap premium or key man premium
Wacc Cost of Equity Cost of Debt 8) Difference risk free interest rate to effective interest rate paid by the company

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Confidential 1/1 08/11/2023