All Industries, Financial Model, General Excel Financial Models

Excel, Free Financial Model Templates, WACC (Weighted Average Cost of Capital)

The free excel template helps the user to calculates the weighted average cost of capital for the long-term funding used by the firms, supplied by its creditors (or lenders) and the owners (or shareholders),

Inputs in the green cells only

Equity financing (Column C, Row 8): The long-term funding supplied by the shareholders includes both common stock and preferred stock, common stock includes outstanding common stock and retained earnings

Debt financing (Column C, Row 9): The long-term funding supplied by the creditors is long term debt only. Accounts payable, accrued expenses, and other non-debtor current liabilities are excluded, short term seasonal debt is also excluded if the short-term debt is continuing as a revolving, so that debt can be included as part of long-term debt

Risk-free rate (Column F, Row 8): is the return of an investment with zero risks, approximated by the return on a very short government treasury bond
Market risk premium (Column F, Row 9): is the difference between the expected return on a market portfolio and the risk-free rate
Levered beta (Column F, Row 10): is a measure of market risk
Debt interest (Column I, Row 8): it is annual interest on long term debt
Corporate tax (Column I, Row 9): tax on net profit

Outputs

After you fill the green cells, the data will dynamically flow into the following below

Capital structure weights
Cost of equity using CAPM formula
Cost of debt after tax
Weighted average cost of capital
First dashboard showing the impact of changing capital structure on WACC
Second dashboard showing the impact of changing levered beta on WACC

If you have any inquiry, modification or to customize the model for your business please reach me through: [email protected]