Weighted Average Cost of Capital WACC
The blended return a company must earn to satisfy all its investors — both lenders and shareholders.
What it is
WACC is the average cost of every dollar a company uses to fund itself, weighting the cost of debt and the cost of equity by how much of each it has. It is the discount rate most often used in a discounted cash flow (DCF) model to value the whole firm. Because debt holders are paid before shareholders, debt is usually cheaper than equity.
Why it matters
WACC is the hurdle rate: a project or company that earns more than its WACC creates value, and one that earns less destroys it. In a DCF, even a small change in WACC can swing the estimated value substantially, so it is one of the highest-leverage inputs in any valuation.
How it's calculated
Weight the after-tax cost of debt and the cost of equity by the market-value share of debt and equity in the capital structure, then add them. Interest is tax-deductible, so the debt portion is multiplied by (1 minus the tax rate).
How Quintarthai uses it
Quintarthai surfaces the inputs behind WACC — beta, debt load, and effective tax rate — on a company's deep-analysis pages, so you can sanity-check the discount rate a model uses.