Weighted Average Cost of Capital. An average representing the expected return on all of a company's securities. Each source of capital, such as stocks, bonds, and other debt, is assigned a required rate of return, and then these required rates of return are weighted in proportion to the share each source of capital contributes to the company's capital structure. The resulting rate is what the firm would use as a minimum for evaluating a capital project or investment.

Use WACC in a sentence

Before starting a new project or initiative most companies calculate the WACC to see if the project is worthwhile and will be profitable.

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If you want to take a full account of where you stand then you will need to try and figure out the WACC.

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You should try and figure out how to use the WACC to your advantage when you are dealing with a new plan.

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ROC Return on Capital