Free calculator · Corporate Finance
Cost of Equity (CAPM) & WACC
Calculates a CAPM cost of equity, with an optional size premium, and blends it with the after-tax cost of debt into a weighted average cost of capital. Inputs are the risk-free rate, beta, equity risk premium, size premium, capital-structure weights, pre-tax cost of debt, and tax rate.
By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026
From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.
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Cost of Equity (CAPM) & WACC
Cost of equity
10.0%
CAPM
WACC
8.9%
the discount rate
CoE = 4.0% + 1.20 × 5.0% = 10.0%
WACC = 70.0% × 10.0% + 30.0% × 6.3% = 8.9%
After-tax cost of debt
6.3%
rate × (1 − tax)
Equity weight
70.0%
E / V
Debt weight
30.0%
D / V
CAPM builds the cost of equity from the risk-free rate + beta × ERP; WACC blends it with the tax-shielded cost of debt. The output is the whole valuation's lever, a 2% shift in WACC can move value 30–50%.
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This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.
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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.