WACC Analysis (Stock Comparison)

WACC (Weighted Average Cost of Capital) is a calculation of a firm's cost of capital in which each category of capital (equity & debt) is proportionately weighted. The lower the WACC of a company the better, as it indicates that the company is able to raise funds at a lower cost. Ideally, the Return on Invested Capital (ROIC) of a company should be greater than its WACC. This template can be used to compare the cost of capital of upto 5 companies and understand which one is able to raise funds cheaply. Since WACC varies with Industry, ideally it should be used to compare companies in the same sector but can be used either ways as well