What is the weighted average cost of capital (WACC)?
The weighted average cost of capital, or WACC, is the return a company must deliver to those who fund it, shareholders and lenders, weighted by the share each represents in its financing. French-language documents call it CMPC, for coût moyen pondéré du capital. It is the rate at which future cash flows are discounted to give a value today.
It is built up block by block: a risk-free rate, the sector beta applied to the market risk premium, a size premium, then the premiums specific to the file. Every one of those blocks is open to challenge, and that is where value is decided: one point less of WACC can move enterprise value by tens of percent. A buyer, an auditor or a tax authority will contest the rate before contesting the cash flows.
Hectelion provides a free WACC calculator. What sets it apart is not the formula, which everyone knows, but the fact that every parameter is tied to a dated source: observed risk-free rates and market returns, sector unlevered betas, size premium by capitalisation decile, country risk premium. It does not replace a valuation: it gives a defensible order of magnitude and states where each figure comes from.
Who is the WACC calculator for?
Finance teams in SMEs and mid-market companies
Startup and deep tech founders
Advisors, auditors and valuation professionals
What needs does the WACC calculator address?
The calculator answers situations where a discount rate has to be set and defended: a business plan to discount, a terminal value to calibrate, an impairment test under IAS 36 or Swiss GAAP FER 27, a purchase price allocation and its WARA, a negotiation where the buyer puts forward a rate of their own. It also serves to price what a technology milestone is worth, through a maturity premium grounded in the TRL, MRL and SRL scales. The aim is never to decide in your place, but to make every assumption visible and open to discussion.
A rate straight away
Two figures are enough to start, your equity and your financial debt. Everything else is pre-filled from observed market data, and every parameter stays editable if you disagree with it.
Traceable assumptions
A rate is not defended by its level but by the way it was built. The calculator sets out the unlevered beta of the sector panel, its relevering at your leverage, the size premium decile retained and the technology maturity band, line by line.
Sourced parameters
The risk-free rate and the market return are dated observations, the betas come from a panel of listed companies in the sector, the size premium from a table by capitalisation decile, the country premium from a sovereign table. Every source is cited in the report, with its date.
Facing a third party
Facing a buyer, a bank, an auditor or a tax authority, a gap in rates is argued line by line. Having a written, sourced and reproducible build-up changes the nature of the conversation.
Stated limits
The maturity premium is capped, and the tool says so: beyond that, a rate no longer describes compensation for risk, it conceals a probability of failure that belongs in the cash flows. The premium bands are presented for what they are, Hectelion's own documented working assumptions, not professional standards.
Going further
A rate that can be held against a third party requires a written engagement and a review of the file. The calculator tells you where you stand and on which items the gap will be argued, so you can decide knowingly whether a mandate is warranted.
How to use the WACC calculator
step 1
Scope
What you are valuing, a company, a startup or an intangible asset, then the country, the sector, your equity and your financial debt. Two figures are enough for a first result.
step 2
Market parameters
Risk-free rate, market return, unlevered beta of the sector panel and size premium are already observed and dated. Nothing to do, unless you disagree with a value.
step 3
Capital structure
The equity and debt weights follow from the balance sheet you enter, and the beta is relevered at the resulting leverage. Editable if you weight to a target structure.
step 4
Technology maturity
If a technology carries the value, turn on the TRL, MRL and IRL scales. The SRL follows, the premium follows from it, and the cap keeps the rate from absorbing a probability of failure.
step 5
Other risk premiums
Company specific risk premium and country risk premium, left at zero by default because a premium has to be justified. The country premium is seeded from the country you chose.
step 6
Result and report
The rate is shown with its breakdown, line by line. The PDF report sets out the build-up, the charts, the sources and the limits.
From the risk-free rate to the weighted average cost of capital
In a business valuation, the discount rate is built one step at a time. Each line adds a return requirement, and the bar beside it shows what that line weighs in the total. The assumptions feeding each step are on the right.
How was the WACC calculator built?
The calculator starts from something seen in practice: in a transaction file, the discount rate is the most contested assumption and the least documented. Everyone puts forward a WACC, almost nobody shows where its building blocks come from.
So it was built the other way round from the usual calculators. Rather than asking you to enter a risk-free rate, a beta and a market risk premium you would have to look up elsewhere, the tool brings them already observed, dated and sourced. Two figures are then enough for a first result: your equity and your financial debt. Every parameter stays editable, and the gap to the reference table is displayed as soon as you move away from it.
The calculation runs entirely in your browser. None of the values you enter is sent to Hectelion, only the contact details you provide to request the report.
Who built the WACC calculator?
The calculator was built by Aristide Ruot, founder of Hectelion SA, an independent French and Swiss corporate finance firm specialising in valuation, financial due diligence and mergers and acquisitions.
The frameworks it applies come from real engagements: valuations of SMEs and mid-market companies, purchase price allocations, impairment tests, valuations of intangible assets for transfer pricing, and work on technology companies whose value depends on a milestone not yet reached.
He writes the code, the automation and the market data routines himself. The calculator is the direct extension of that double skill set: command of valuation methods and the ability to turn them into a verifiable tool.
That origin explains a deliberate stance: the tool would rather state a limit than produce a flattering figure. A capped premium, a range instead of a single point, a dated source rather than an unspoken convention.
What does the WACC calculator contain?
The calculator covers the whole build-up of the rate. You choose what is being valued, a company, a startup or an intangible asset, then the country and the sector. It then retrieves the risk-free rate, the market return, the median unlevered beta of a panel of listed companies in the sector and the size premium by capitalisation decile.
You enter your equity and your debt, the capital structure follows, the beta is relevered, and the cost of equity is weighted with the after-tax cost of debt.
On top of that, at your discretion, come a technology maturity premium grounded in the TRL, MRL and SRL scales, a company specific risk premium and a country risk premium. The result downloads as a report, with the line-by-line build-up, the charts and the sources.
What the calculator does not do
No enforceable rate
The result is an indicative order of magnitude. A rate put to a tax authority, a buyer, an auditor or a court requires a written engagement and a review of the file. The calculator creates neither a mandate nor an advisory relationship.
Your figures are not verified
The result follows entirely from what you enter. Nothing is reconciled to your accounts or audited. An error of scope, of currency or in classifying a debt item is enough to make the rate unusable.
Not every risk
The maturity premium is capped. Beyond that, a rate no longer describes compensation for risk, it conceals a probability of failure, which belongs in the cash flows. Regulatory, commercial and competitive risks stay outside the model.
Where the cost of capital comes in
WACC, the full method
Business valuation
Startup valuation
The SRL and its effect on the rate
Intangible asset valuation
Purchase price allocation
Our methodological standards
The calculator applies the same build-up as our engagements: the cost of equity is built block by block, not by analogy. Risk-free rate, sector beta applied to the market risk premium, size premium, then the premiums specific to the file.
Betas are unlevered and then relevered using the Hamada formula, at the leverage you retain. The size premium is read by capitalisation decile. The country risk premium follows sovereign ratings and is applied to where the cash flows arise, pro rata the revenue exposed, not to the registered office.
Technology maturity follows the recognised scales: TRL from NASA and the European Commission, IRL for integration, the SRL composite from the Sauser and Ramirez-Marquez matrix, MRL from the Department of Defense for manufacturing maturity. The premium bands derived from them are Hectelion's own and are presented as such: documented working assumptions, not professional standards.
One principle governs the whole: the rate must not become the container for every uncertainty. The maturity premium is capped, and what exceeds it is handled in the cash flows through a survival probability. A rate of 45% is not a valuation, it is a failure to model failure. The calculator is neither a valuation within the meaning of the IVSC standards nor investment advice. Page updated on 9 November 2026. Market parameters observed on 15 October 2026, country risk premiums from the table of 5 January 2026.
Frequently asked questions
Because the rate sits in the denominator and applies across the whole life of the cash flows, terminal value included.
One example can be checked by hand. With a constant normative cash flow and long-term growth of 2.0%, moving from a rate of 10.0% to 9.0% takes the implied multiple from 12.5 to 14.3, which is 14% more value for one point of rate.
That is why a buyer, an auditor or a tax authority contest the rate before they contest the cash flows.
Yes, it is one of the options offered. Capital structure does not apply to an asset taken on its own: you work on the cost of equity, adjusted for the risk specific to the asset.
An intangible asset does not carry the same risk as the company operating it. An established brand usually earns below the company's rate, a technology still in development well above. It is the starting point for a WARA in a purchase price allocation.
Both. What is being valued is chosen at the start, and the parameters requested adjust accordingly.
A seed-stage startup often carries no financial debt, and the weighted average cost of capital then coincides with the cost of equity. A later-stage startup usually does carry debt: the calculator forces nothing, and you set the debt weight to zero or not according to your actual situation.
TRL measures the maturity of a technology on a scale of 1 to 9, from idea to deployment in real conditions. IRL measures how mature its integration into a system is. The two combine into a composite index, the SRL.
That index places the system in a risk band, matched to a range of premium points. The point is to stop technology risk disappearing into an arbitrary company specific premium: you state which scale you are on, and why.
By capitalisation decile. Listed companies are ranked by equity value, and the return gap observed between the smallest and the largest gives the premium for that decile.
The lower the equity value, the higher the premium. The calculator reads the table and lets you adjust the value retained, because the decile alone does not tell the whole story of a private company.
Both, in that order. You start from the sector unlevered beta, which strips out each peer's own capital structure and leaves only operating risk. You then relever it at the leverage of the company being valued.
It is the relevered beta that enters the CAPM and multiplies the market risk premium. Taking a listed peer's beta directly means importing that peer's debt into your file.
The calculator gives a defensible order of magnitude and states where each figure comes from. It does not replace a valuation.
An auditor, a buyer or a tax authority expect a rate tied to the file: peers retained and rejected, normative leverage, premiums justified one by one. That work belongs in an engagement. The calculator is there to frame the discussion beforehand, and to check that a rate someone puts to you is not off-market.
Every parameter is tied to a dated source, not to an in-house convention: risk-free rates and market returns observed by country, unlevered betas by sector, size premium read by capitalisation decile, country risk premium taken from the table published by Aswath Damodaran.
The report states the observation date for each value. That is what lets you defend the rate in front of a third party rather than simply assert it.
Yes. The calculation is free and without commitment, as many times as you like.
The detailed report, which sets out every parameter and its source, is emailed to you once you leave your contact details. That is the only thing asked in return.
None. CMPC is the French term for weighted average cost of capital, coût moyen pondéré du capital. Both describe the same rate and are calculated the same way.
Usage depends on the document: a report written in French will say CMPC, an Anglo-Saxon memorandum or model will say WACC. If you see both terms in one file, they point to the same figure.
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