WACC indicates that a company is spending a relatively large amount of money to raise capital. Basically, the formula asks you first to establish the cost of debt and the cost of equity. Then you multiply each of those by their proportionate weight of market value. Add those two figures together and multiply the result by the business's corporate tax rate. These calculations are rarely done manually, much easier to use excel to figure out the company's WACC. How to Give her an idea instructive to this comment