weighted average cost of capital capital structure
Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.All capital sources-common stock, preferred stock, bonds and any other long-term debt-are included in a WACC calculation.ACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.