Netflix, Inc. (NFLX) WACC Calculator

WACC = (E/V) × Re + (D/V) × Rd × (1 − Tc). E is the market value of equity (market cap) and D is total debt, so V = E + D. Re is the cost of equity, Rd is the cost of debt and Tc is the tax rate. This calculator fills in E, D, Rd and Tc from the company's latest 12 months of filings. If a company reports debt but no interest expense, Rd is estimated as the risk-free rate plus a 1.5% credit spread and labelled as an estimate. You can change every input.

The company's shareholders and lenders together expect about 12% a year for funding it. A project that earns less than 12% loses value for them. A project that earns more adds value. Analysts also use 12% as the discount rate for that company's future cash flows.

A lower WACC means cheaper money, but a good WACC depends on the business. Large, stable companies are often at 6–9%. Smaller or riskier ones can be above 12%. The gap that matters is between WACC and the return on invested capital: a company that earns 15% on money that costs 8% builds value.

Beta shows how much a stock moves with the market. Data providers usually measure it from five years of monthly returns against an index such as the S&P 500, and most quote pages show it. Here it is an input you can change: 1.0 is the market average, defensive stocks are below 1 and cyclical stocks above.

WACC assumes that the mix of debt and equity, the risk and today's tax rate stay the same. It also depends on estimates of beta and the equity risk premium. For a company with changing debt, losses or an unusual tax position, treat the result as a starting range and test how much your valuation depends on it.