10-year Treasury Rate September 2025 Current Wacc Calculation
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WACC Projection Calculator: September 2025
Projected risk-free rate for Sept 2025
Asset sensitivity to market volatility
Expected return above Rf
Average rate on company borrowings
Current market capitalization
Total interest-bearing debt
Applicable statutory tax rate
Estimated WACC: 0.00%
Understanding WACC and the September 2025 10-Year Treasury Outlook
The Weighted Average Cost of Capital (WACC) serves as a critical benchmark for corporate finance, representing the minimum return a company must earn on its existing asset base to satisfy its creditors, owners, and other providers of capital. As we look toward September 2025, the 10-year Treasury rate remains the foundational "Risk-Free Rate" (Rf) used in CAPM calculations.
Why the 10-Year Treasury Rate Matters
In financial modeling, the 10-year Treasury yield is typically used as the risk-free rate because it matches the long-term horizon of most capital investments. By September 2025, market analysts anticipate fluctuations based on inflation cooling and Federal Reserve monetary policy shifts. When the 10-year yield rises, the cost of equity increases, which in turn elevates the WACC, making new projects more difficult to justify via Net Present Value (NPV) analysis.
The Calculation Components
Cost of Equity (Re): Calculated using the Capital Asset Pricing Model: Re = Rf + β(Rm - Rf). This represents the return demanded by shareholders.
Cost of Debt (Rd): The yield to maturity on a firm's debt. We use the after-tax cost because interest expense is tax-deductible.
Capital Structure Weights: The proportion of the company funded by equity vs. debt based on current market values.
September 2025 Scenario Example
Imagine a technology firm evaluating a project in September 2025. If the 10-year Treasury is at 4.25% and the company has a Beta of 1.2 with an Equity Risk Premium of 5.5%, the Cost of Equity would be 10.85%. If their debt is held at 6% pre-tax with a 21% tax rate, their after-tax cost of debt is 4.74%. With a 70/30 equity-to-debt ratio, the resulting WACC would be approximately 9.02%.
function calculateWACC() {
var rf = parseFloat(document.getElementById('rfRate').value) / 100;
var beta = parseFloat(document.getElementById('betaValue').value);
var erp = parseFloat(document.getElementById('erpValue').value) / 100;
var rd = parseFloat(document.getElementById('debtCost').value) / 100;
var tax = parseFloat(document.getElementById('taxRate').value) / 100;
var equity = parseFloat(document.getElementById('equityValue').value);
var debt = parseFloat(document.getElementById('debtValue').value);
if (isNaN(rf) || isNaN(beta) || isNaN(erp) || isNaN(rd) || isNaN(tax) || isNaN(equity) || isNaN(debt)) {
alert("Please ensure all fields are filled with valid numeric values.");
return;
}
var totalValue = equity + debt;
if (totalValue <= 0) {
alert("Total Capital (Equity + Debt) must be greater than zero.");
return;
}
// Step 1: Calculate Cost of Equity (CAPM)
var costOfEquity = rf + (beta * erp);
// Step 2: Calculate After-Tax Cost of Debt
var afterTaxDebt = rd * (1 – tax);
// Step 3: Calculate Weights
var weightEquity = equity / totalValue;
var weightDebt = debt / totalValue;
// Step 4: Calculate WACC
var wacc = (weightEquity * costOfEquity) + (weightDebt * afterTaxDebt);
var waccFinal = (wacc * 100).toFixed(2);
// Display Result
var resultDiv = document.getElementById('waccResult');
var resultSpan = document.getElementById('waccPercent');
var costOfEquitySpan = document.getElementById('costOfEquityDisplay');
resultSpan.innerText = waccFinal + "%";
costOfEquitySpan.innerHTML = "Projected Cost of Equity: " + (costOfEquity * 100).toFixed(2) + "% | After-Tax Cost of Debt: " + (afterTaxDebt * 100).toFixed(2) + "%";
resultDiv.style.display = 'block';
}