weighted average cost of capital

WACC [%] - Formula used to calculate the actual cost of capital used to finance a project. Typically refers to the weighted cost of both debt (e.g. from a bank) and equity (from private investors). For instance, if a project uses 80% debt at a rate of 5% and 20% equity at a rate of 10%, the WACC will be 6%. This represents the cost of capital used to finance that project.

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