Quick Start

If you’re familiar with WACC concepts, follow these steps to get started quickly.
1

Set Up

Download and open the Excel model. Enable editing and macros if prompted.

2

Input Assumptions

Enter capital structure, cost of debt, tax rate, and cost of equity inputs.

3

Review Output

Review the calculated WACC.

4

Apply

Use WACC as a hurdle rate for valuation, investment, capital asset pricing models (CAPM) and strategy decisions.

Getting Started

This section explains where to enter inputs and how to think about each component of WACC.
  • Download and save the Excel file locally
  • Enable editing and macros if prompted
  • All input cells are clearly labeled

The model is structured to keep assumptions transparent and auditable.

Enter the following inputs:

Capital Structure

  • Proportion of debt and equity

Cost of Debt

  • Interest rate on debt
  • Applicable tax rate

Cost of Equity Inputs

  • Risk-free rate
  • Equity beta
  • Market risk premium

These inputs are combined to calculate a blended WACC consistent with finance theory.

To ground assumptions:

  • Identify 3–5 comparable public companies
  • Record their ticker symbols
  • Gather debt, equity, and tax information from recent public filings (10-K, 10-Q, or annual reports)

Comparables help validate beta, capital structure, and market assumptions.

How It Works

This section explains the underlying logic for audit support and validation.

The tool calculates WACC by combining:

  • Cost of equity
  • After-tax cost of debt
  • Capital structure weights

Key principles:

  • Market values are more accurate than book values
  • Lower WACC increases valuation by reducing the discount rate
  • WACC should reflect the company’s true economic risk, not accounting artifacts

The result is a consistent and defensible hurdle rate for decision-making.

Best Practices

  • Use current market data for risk-free rates and market risk premiums
  • Align debt and equity weights with market values, not book values
  • Revisit assumptions periodically as interest rates, tax law, or risk profile changes
  • Use this tool alongside the Valuation Multiple Tool to translate WACC into valuation benchmarks

Support & Next Steps

If something isn’t working as expected, review the items below before reaching out.
  • If outputs do not update, ensure Excel calculation mode is set to Automatic
  • Confirm all required inputs are completed (risk-free rate, beta, market premium, debt rate, tax rate)

If issues persist:

Still need help? Email support@automatedaf.ai and include a screenshot of the issue.