# Trying to calculate WACC (Weighted Average Cost of Capital) for this (small) data set

I've attached the data set I'm working with to this post. I'm trying to calculate the WACC using this data. I found a formula here:

http://www.investopedia.com/ask/answers/063014/what-formula-calculating-weighted-average-cost-capital-wacc.asp

I guess my problem is figuring out what the variables actually stand for, and how I can use the formula across the different Financial statement forecast's. For instance there are 4 different values for Tax rate so I'm not sure which one to use.

The question I'm working on just tells me to calculate the WACC. Any ideas on where to start? Appreciate any help.

## 2 Answers

As you can see, the tax rates are listed (from L - R) as 31.0%, 38.5%, 38.5%, and 38.5%, and because your valuations should be forward looking, you should use what is expected, meaning the 38.5% tax rate. Does that make sense?

WACC formula: E/v * Re + D/V * Rd * (1-Tc)

First thing you have to calculate Cost of equity (Re) in the WACC formula above. To calculate cost of equity you use CAPM formula = rf + Beta * (rm-rf).