CORPORATE FINANCE GLOSSARY
WACC
Weighted Average Cost of Capital
Blended required return of a company's debt and equity capital.
What does WACC mean?
Blended required return of a company's debt and equity capital. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
WACC in context
A business weighs after-tax debt cost and investor return requirements to estimate WACC.
Why it matters in financing
WACC can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related corporate finance terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.