Weighted Average Cost of Capital (WACC)
Also called WACC
The WACC is the average rate of return a company is expected to pay its investors (debt & equity) weighted by their respective proportions in the company’s capital structure, reflecting the overall cost of financing for the company.
In the room
WACC is the discount rate in every DCF, which makes it one of the most drilled topics in technical interviews. Know each component, and be ready for the follow-up: what happens to WACC if the company takes on more debt — and why the answer isn't simply "it goes down."