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What it does

Computes WACC using three independent methods, mirroring the Cost of Capital worksheet in Damodaran’s fcffsimpleginzu spreadsheet.

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Method 1: Detailed (bottom-up)

Builds WACC from first principles in 5 stages:

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Stage 1: Beta

Start with an unlevered beta from Damodaran’s industry averages, then re-lever for the company’s capital structure: 
β(levered) = β(unlevered) × [1 + (1 − t) × (D/E)]

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Stage 2: Cost of Equity (CAPM)

Cost of Equity = Risk-free rate + β × ERP
Four ERP sources available: manual input, country of incorporation, operating regions, or implied.

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Stage 3: Cost of Debt

Uses a synthetic rating based on interest coverage ratio (ICR): 
ICR = EBIT / Interest Expense → Rating → Default Spread → Cost of Debt
The synthetic rating table maps ICR ranges to bond ratings and corresponding default spreads.

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Stage 4: Capital Structure

Market-value weights:
  • Equity = shares × current price
  • Debt = book value of debt (approximation for market value)

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Stage 5: WACC

WACC = (E / (E+D)) × r(e) + (D / (E+D)) × r(d) × (1 − t)

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Method 2: Industry Average

Looks up the company’s industry in Damodaran’s dataset and returns the industry average cost of capital directly.

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Method 3: Distribution

Shows where the company’s WACC falls on the industry-wide distribution (percentile ranking). Useful for sanity-checking the detailed estimate.