Weighted Average Cost of Capital

The blended yearly cost of all the money funding a business, combining the cost of its debt and the return its shareholders expect, weighted by how much of each it uses.

WACC is the hurdle rate a project must beat to be worth doing, and it is the rate used to discount future cash in a valuation.

A company funded half by loans costing 6% and half by equity expecting 14% has a WACC of about 10%.