Weighted Average Cost of Capital (WACC)
The weighted average cost of capital is the average after-tax return a company must pay to all its providers of finance, weighted by the share of debt and equity it uses.
What is Weighted Average Cost of Capital (WACC)?
WACC is the hurdle rate for investment and, in regulation, the allowed rate of return built into charge controls such as Ofcom's for Openreach. The cost of equity is usually estimated with the CAPM and combined with the after-tax cost of debt.