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How to use the tool:
The Fairness Finance simplified Wacc calculator can be used to estimate the cost of capital applicable for discounting operating cash flow. The result is obtained by entering, in the fields below, the necessary assumptions (in percentages except for the levered beta). After entering a zone / index, a direct link to the data provided by Fairness Finance is activated (
, access restrictions apply depending on the subscription level). A click on 
allows a direct access to the glossary section describing the parameter considered. The intermediate steps of the calculation (cost of equity, cost of debt) and the final result are updated after entering the fields necessary for their calculation or after clicking on the update button.
Formulas used :
- Cost of Equity = Risk Free Rate + CAPM Risk Premium x Sector Beta + Forecast Risk Premium (Default Risk and Optimistic Bias, estimated by subtracting the CAPM Premium from the Market Premium) + Size Premium
- Cost of Debt = Pre-tax Cost of Debt x (1 - Corporate Tax Rate)
- Wacc = Financial Leverage x Cost of Debt + (1 - Financial Leverage) x Cost of Equity
Note : The WACC applicable to cash-flows already taking into account the default risk and an optimistic bias can be obtained by entering a market risk premium equal to the CAPM risk premium.
The Advanced calculator (coming soon) will allow the use of our full methodology and data (available only via Excel and Power BI matrices at this date) through an interactive tool that will allow the adjustment of the forecast risk premiums and the automatic filling of the fields directly from our database.
* The WACC calculator proposed by Fairness Finance is based on the data and methods described in the methodology section of the site, in particular in our technical notes 1 to 5. Direct links to the pages of the site providing the information (access restrictions apply depending on the subscription level) as well as the corresponding sections of our glossary are provided in front of each item above.
This calculator is provided as an illustration of the Fairness Finance method. We remind you that our tools are intended for professional users, and that they are not intended to replace their judgment. The user therefore remains responsible for the choice and use of the data and results.
