The Backstory:

This site is a direct result of an embarassing question I was asked in early 2008. I had been working as a finance manager at a large retailer for several years when one day Andy, a recent MBA grad, walked into my office and asked "What's our WACC?"

I knew what WACC was, but I sure didn't know the WACC for our firm. I had only calculated WACC in finance classes, where the teacher gave you values for all the stuff you had to throw into the equation. Once I entered the real world, no one was feeding me values of Tc = 34% and r_D = 8% on a daily basis.

I had never really bothered to actually calculate our firm's WACC, and just figured it was probably around 10%, like the answer to all the problems in school. So there I was, feeling like a total idiot in front of the eager young MBA. You know that look people get when they realize that you've been performing Discounted Cashflow Analyses on projects for the past 3 years without really knowing what the appropriate discount rate is? I got one of those looks.

Soon, however, I realized that no one else in our firm's finance group knew exactly what our WACC was. And do you know what happened when I asked friends at other companies about their firm's WACC? They called me a nerd, that's what. But then they followed up by saying that they didn't know their WACC, either.

So here we are... a website that removes any excuse for knowing the WACC for any firm.

Copyright © 2017 Mitch Hollberg

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