Find the cost of equity
Find the cost of debt
Determine the market value of equity
Determine the market value of debt
Calculate the total market value of capital
Compute the weight of equity = market value of equity ÷ total market value of capital
Compute the weight of debt = market value of debt ÷ total market value of capital
Determine the corporate tax rate
Calculate after-tax cost of debt = cost of debt × (1 – tax rate)
Calculate WACC = (weight of equity × cost of equity) + (weight of debt × after-tax cost of debt)