Weighted average cost of capital (WACC)
Weight your entered equity and debt costs.
What the figures mean
- Weighted average cost of business funding (WACC)
Combines the cost of equity and borrowing according to their shares. The debt tax adjustment applies only when explicitly selected in the model.
Simple example: Half the funding costs 10% and half 6%, with no tax adjustment: the weighted cost is 8%.
- Owners’ equity
In company accounts, assets less liabilities. In a property investment, your initial equity is your own money; the estimated value of your stake can differ from that amount.
Simple example: Company assets of €100,000 less €60,000 liabilities leave €40,000 of book equity.