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WACC = (E / V) * Re + (D / V) * Rd * (1 – Tc)

E: Market value of the company’s equity (common and preferred stock)
V: Total market value of the company (E + D)
Re: Cost of equity (expected return rate for shareholders)
D: Market value of the company’s debt (bonds, loans)
Rd: Cost of debt (interest rate on debt)
Tc: Corporate tax rate

• Low WACC is generally preferable: It signifies a company can access capital at a lower cost, leading to potentially higher profitability and attractiveness to investors.
• High WACC can be detrimental: It implies a higher cost of capital, which can hinder profitability and make it harder to compete in the market.

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