The weighted average cost of capital (WACC) is a widely used financial concept that determines whether a return on investment can exceed or meet the cost of invested capital (equity debt) for an asset ...

Esty, Benjamin C., and E. Scott Mayfield. "The Weighted Average Cost of Capital (WACC): Derivation, Intuition, and Applications." Harvard Business School Technical Note 221-106, June 2021.

The cost of equity is one component of calculating a company's WACC. The cost of equity is the return that a business pays out to its equity investors. In other words, it is the expense that a ...

WACC takes into consideration the entire capital structure of a firm, which includes common stock, preferred stock, bonds, and any other long-term debt. Several factors are necessary to calculate ...

The WACC formula is: Factors that affect the cost ... Companies perform the cost of capital calculation to determine the minimum return they need on investments to cover their financing costs.