How it works
The equity weight and remaining debt weight combine two capital costs entered on a consistent basis. This form solves for equity cost; enter the known quantities in Weighted cost, Debt cost, Equity weight.
Inputs and units
| Input | Example value | What to enter |
|---|---|---|
| Weighted cost | 9 % | Formula symbol: w. Enter the percentage as a number: for 15%, enter 15. Use a non-negative value. Allowed range: 0–100. |
| Debt cost | 6 % | Formula symbol: debt. Enter the percentage as a number: for 15%, enter 15. Use a non-negative value. Allowed range: 0–100. |
| Equity weight | 50 % | Formula symbol: weight. Enter the percentage as a number: for 15%, enter 15. Must be greater than zero. Allowed range: 0.001–99.999. |
Worked example
Show example inputs and results
This example is generated by the same calculation engine using the starting values in the form. Your own inputs produce your own result.
- Weighted cost
- 9 %
- Debt cost
- 6 %
- Equity weight
- 50 %
Complete example results
- Equity cost
- 12 %
Reading the result
The result solves for equity cost from the entered quantities. Check the result unit and the formula conditions before using it.
Questions and answers
Can I use the example values for my own calculation?
The example values illustrate the calculation. Replace every input with your own information, especially dates, rates and the selected operation.
When can I use the equity cost result?
Enter debt cost already on the intended pre- or post-tax basis; no tax shield is calculated. The scenario is not a market quote or an earnings guarantee.
Why are some results rounded?
Results display up to 8 decimal places. Calculations use the unrounded values; very small values use scientific notation. JavaScript floating-point arithmetic can introduce tiny rounding differences.
Are my inputs sent to a server?
The calculator processes inputs in your browser. Its code does not send your values to a server.
Method sources: openstax.org