Definition
WACC (Weighted Average Cost of Capital)
Blended cost of debt and equity used to discount future cash flows in a DCF.
WACC = (E/V × Re) + (D/V × Rd × (1 − T)). For private-company DCFs the equity cost is built up from a risk-free rate, equity risk premium, beta (often borrowed from a public comp set), and a size premium. The number is always 'right within a range' — a 100bp move in WACC shifts a typical DCF value by 10–20%.
See also