Erik Wiedenhöft Senior Interim Executive
CORPORATE FINANCE • IDW S 1 & IAS 36

WACC & Cost of Capital Calculator

Financial modeling and valuation benchmark calculation of the Weighted Average Cost of Capital (WACC) under standard IDW S 1 and IAS 36. Determine CAPM cost of equity, post-tax cost of debt (interest tax shield), pre-tax WACC for CGU impairment testing, and evaluate parameter sensitivities in the interactive 2D matrix including a comprehensive audit trail.

Cost of Capital & Market Data

Bundesbank / Svensson
IDW FAUB: 6.0 % - 8.0 %
Levered Equity Beta
Effective borrowing cost before tax
Combined rate (CIT + SolZ + Trade Tax)
Capital Structure & Risk Premia
Market capitalization / Equity (E)
Interest-bearing Net Debt (D)
Additional risk premium for mid-market entities

Cost of Capital Rates Post-Tax WACC

WACC (Post-Tax)
0.00 %
Discount rate for Free Cashflows
WACC (Pre-Tax / IAS 36)
0.00 %
Value in Use under IAS 36.55
Cost of Equity kE
0.00 %
CAPM return requirement
Post-Tax Cost of Debt kD
0.00 %
Incl. Tax Shield (-0.00 %)
  • Equity Ratio (E / V): 0.00 %
  • Debt Ratio (D / V): 0.00 %
  • Total Enterprise Value (V = E + D): 0.00 €
  • Annual Tax Shield (Cash savings p.a.): 0.00 €
Mathematical Derivation & Audit Trail
Formula Breakdown
1. Cost of Equity (CAPM):
kE = rf + (β × MRP) + SSP -
2. Post-Tax Cost of Debt:
kD, post = rD × (1 − s) -
3. Weighted Average Cost of Capital (WACC post-tax):
WACC = (E/V × kE) + (D/V × kD, post) -
4. Pre-Tax WACC (IAS 36.55):
WACCpre ≈ WACC / (1 − s) -

2D Sensitivity Matrix: Post-Tax WACC

Corridor analysis: Variation of WACC across shifts in Beta (β) and Risk-Free Rate (rf). The highlighted cell indicates current baseline inputs.

Return & Interest Rate Components

Comparison of CAPM equity requirement, cost of debt pre/post tax, and resulting weighted capital cost (WACC).
CFO ADVISORY & IMPAIRMENT TESTING

Preparing a business valuation or annual goodwill impairment test?

Whether methodical valuation models aligned with IDW S 1, goodwill impairment testing under IAS 36 (CGU level), or preparation for M&A transactions: As an experienced Senior Interim CFO, I structure audit-proof valuation documentation and defend your cost of capital robustly before auditors and board committees.

Inquire Mandate Confidentially
Corporate Finance Practice Guide

Cost of Capital Modeling under IDW S 1 and IAS 36

The Weighted Average Cost of Capital (WACC) serves as the central discount rate in Discounted Cash Flow (DCF, Entity Approach) procedures to determine Enterprise Value.

1. Cost of Equity via CAPM

Under the Capital Asset Pricing Model, the required return on equity consists of a risk-free base rate and an equity risk premium:

  • Risk-Free Rate (rf): Derived from German government bond yield curves using the Svensson method (standard IDW procedure).
  • Market Risk Premium (MRP): Long-term empirical excess return of equity markets over government bonds (IDW FAUB recommendation: 6.0% to 8.0%).
  • Beta Factor (β): Gauges systematic operational and financial risk relative to market indices (peer group unlevering/relevering).
  • Small Cap Premium: Applied in mid-market valuations to account for illiquidity, key-person risk, and lower diversification.

2. Cost of Debt and Corporate Tax Shield

Because interest expenses reduce taxable earnings, the gross borrowing rate is adjusted for the tax shelter:
kD, post-tax = rD × (1 − s)

3. Pre-Tax WACC for IAS 36 Impairment Testing

Under IAS 36.55, cash flows used in determining Value in Use are pre-tax, requiring the formal disclosure of a pre-tax discount rate. In financial practice, this is approximated by grossing up the post-tax WACC: WACCpre ≈ WACCpost / (1 − s).

Frequently Asked Questions

Key Valuation Questions

How is WACC calculated?
WACC weights the cost of equity (via CAPM) and the post-tax cost of debt by their respective capital structure proportions: WACC = (E/V * kE) + (D/V * kD * (1 - s)).
What is the interest tax shield?
Interest expenses are tax-deductible expenses. This reduces the effective economic financing burden of debt by the marginal tax rate: kD * (1 - s).
What market risk premium does the IDW suggest?
The FAUB valuation committee of the Institute of Public Auditors in Germany (IDW) currently recommends an equity market risk premium range between 6.0% and 8.0% (central estimate of 7.0%).
Why distinguish between Pre-Tax and Post-Tax WACC?
While DCF business valuations are conducted post-tax in corporate finance practice, IAS 36 formally requires pre-tax discount rates for CGU goodwill impairment tests, commonly derived via iteration or gross-up formulas.
Valuation Review & Methodology
Erik Wiedenhöft

Senior Interim Executive & CFO Advisory. Specializing in statutory business valuation under IDW S 1, IAS 36 impairment testing, transaction modeling, and fast close reporting.

Imprint

Information pursuant to § 5 German Digital Services Act (DDG)

Erik Wiedenhöft
Senior Interim Executive
Am Sandtorkai 58
20457 Hamburg
Germany

Contact

Phone: +49 40 23830770
E-Mail: [email protected]

Legal Form

Sole Proprietorship (Freelance / Independent Professional Activity)

VAT ID

VAT Identification Number pursuant to § 27 a Value Added Tax Act:
DE 305962047

Professional Notice & Scope of Services (§ 33 StBerG / RDG)

The services offered on this website exclusively comprise business consulting and commercial interim management. Professional assistance in tax matters within the meaning of reserved professional tasks pursuant to § 33 German Tax Advisory Act (StBerG) – in particular tax consulting, the preparation of tax returns, and the compilation of tax balance sheets – as well as legal services pursuant to the German Legal Services Act (RDG) are explicitly excluded and not provided.

Liability for Content

As a service provider, we are responsible for our own content on these pages in accordance with general laws pursuant to § 7 Abs. 1 DDG. According to §§ 8 to 10 DDG, however, we as a service provider are not obligated to monitor transmitted or stored third-party information or to investigate circumstances that indicate illegal activity.

Privacy Policy

1. Data Protection at a Glance

The protection of your personal data is of the highest priority. This website is designed as a data-minimalist informational presence. No cookies are set at any time, no commercial tracking services are loaded, and no user profiles are created. For resource-efficient reach measurement, we rely exclusively on cookiefree, anonymized web analytics.

2. Controller

Erik Wiedenhöft
Am Sandtorkai 58
20457 Hamburg
Phone: +49 40 23830770
E-Mail: [email protected]

3. Hosting, Content Delivery Network (CDN), and Server Log Files

To provide, secure, and rapidly deliver this website, we use a combination of web hosting and an upstream Content Delivery Network (CDN):

a) DNS and Content Delivery Network (Cloudflare)
We use the DNS service and global Content Delivery Network provided by Cloudflare, Inc., 101 Townsend St, San Francisco, CA 94107, USA. Traffic between your browser and our web server is routed through Cloudflare's global network (reverse proxy). This serves to protect against DDoS attacks, ensure reliability, and optimize loading times. Cloudflare technically processes IP addresses and connection metadata for this purpose. Processing is based on our legitimate interest in the security, stability, and high-performance provision of our online offering pursuant to Art. 6 Abs. 1 lit. f GDPR. A Data Processing Addendum based on EU Standard Contractual Clauses has been concluded with Cloudflare; Cloudflare is also certified under the EU-U.S. Data Privacy Framework.

b) Web Hosting and Server Log Files (IONOS)
Our web server (origin server) is operated by IONOS SE, Elgendorfer Str. 57, 56410 Montabaur, Germany. When accessing our website, the web server automatically collects information in server log files that your browser transmits:

The storage of these data is based on Art. 6 Abs. 1 lit. f GDPR to ensure smooth connection establishment and technical security of the server. These data are not merged with other data sources.

4. Web Analytics (Cloudflare Web Analytics)

We use the privacy-friendly web analytics service Cloudflare Web Analytics provided by Cloudflare, Inc., 101 Townsend St, San Francisco, CA 94107, USA.

Completely cookiefree measurement: Cloudflare Web Analytics does not use cookies and does not access local storage or session storage on your device. The measurement of page views, visit duration, and aggregated performance data takes place without storing IP addresses or building user profiles. Cross-site tracking does not take place. Consent pursuant to § 25 Abs. 1 German Telecommunications-Telemedia Data Protection Act (TDDDG) is therefore not required.

Legal basis: Processing is based on our legitimate interest in anonymous, data-minimalist reach analysis and technical optimization of our offering pursuant to Art. 6 Abs. 1 lit. f GDPR.

Data Processing & Third-Country Transfer: We have concluded a data processing agreement with Cloudflare based on the European Commission's Standard Contractual Clauses. Cloudflare is certified under the EU-U.S. Data Privacy Framework.

5. Contact

When you contact us via email, telephone, or other channels, your inquiry and all resulting personal data will be stored and processed for the purpose of handling your request. Data processing is based on Art. 6 Abs. 1 lit. b GDPR (if your request relates to the fulfillment of a contract or is necessary for pre-contractual measures) or otherwise on our legitimate interest in the effective processing of inquiries directed to us (Art. 6 Abs. 1 lit. f GDPR).

Email Service (Google Workspace): We use Google Workspace (Google Ireland Limited, Gordon House, Barrow Street, Dublin 4, Ireland) for handling email communications. A data processing agreement pursuant to Art. 28 GDPR has been concluded with Google.

Telephony (Easybell): We use telecommunication services provided by easybell GmbH (Brückenstraße 5a, 10179 Berlin) for telephone accessibility. Connection data is processed to ensure telecommunications in accordance with statutory provisions.

Data transmitted to us will remain with us until you request deletion, revoke your consent, or the purpose for data storage ceases to apply (e.g., after processing your request is complete). Mandatory statutory provisions – particularly statutory retention periods – remain unaffected.

6. Local System Fonts (No External Web Fonts)

This website completely dispenses with external CDNs for fonts (such as Google Fonts or Adobe Fonts). All fonts are rendered locally via the system fonts of your device. No IP address is transmitted to external font servers.

7. Your Rights

You have the right at any time to obtain free information about your stored personal data, their origin and recipients, and the purpose of data processing, as well as a right to rectification, restriction, or deletion of such data. You also have the right to lodge a complaint with the competent supervisory authority. You can contact us at any time at the address listed in Section 2 regarding this or any other questions concerning data protection.

Impressum

Angaben gemäß § 5 Digitale-Dienste-Gesetz (DDG)

Erik Wiedenhöft
Senior Interim Executive
Am Sandtorkai 58
20457 Hamburg
Deutschland

Kontakt

Telefon: +49 40 23830770
E-Mail: [email protected]

Rechtsform

Einzelunternehmen (Freiberufliche / selbstständige Tätigkeit)

Umsatzsteuer-ID

Umsatzsteuer-Identifikationsnummer gemäß § 27 a Umsatzsteuergesetz:
DE 305962047

Berufsrechtlicher Hinweis & Leistungsausschluss (§ 33 StBerG / RDG)

Die auf dieser Website angebotenen Leistungen beziehen sich ausschließlich auf betriebswirtschaftliche Beratung und kaufmännisches Interim Management. Die geschäftsmäßige Hilfeleistung in Steuersachen im Sinne der Vorbehaltsaufgaben nach § 33 Steuerberatungsgesetz (StBerG) – insbesondere die Steuerberatung, die Anfertigung von Steuererklärungen sowie die Aufstellung von Steuerbilanzen – sowie Rechtsdienstleistungen nach dem Rechtsdienstleistungsgesetz (RDG) sind ausdrücklich ausgeschlossen und werden nicht erbracht.

Haftung für Inhalte

Als Diensteanbieter sind wir gemäß § 7 Abs. 1 DDG für eigene Inhalte auf diesen Seiten nach den allgemeinen Gesetzen verantwortlich. Nach §§ 8 bis 10 DDG sind wir als Diensteanbieter jedoch nicht verpflichtet, übermittelte oder gespeicherte fremde Informationen zu überwachen oder nach Umständen zu forschen, die auf eine rechtswidrige Tätigkeit hinweisen.

Datenschutzerklärung

1. Datenschutz auf einen Blick

Der Schutz Ihrer persönlichen Daten hat höchste Priorität. Diese Website ist als datensparsame Informationspräsenz konzipiert. Es werden zu keinem Zeitpunkt Cookies gesetzt, keine werblichen Tracking-Dienste geladen und keine Nutzerprofile erstellt. Für eine ressourcenschonende Reichweitenmessung setzen wir ausschließlich auf eine cookiefreie, anonymisierte Webanalyse.

2. Verantwortlicher

Erik Wiedenhöft
Am Sandtorkai 58
20457 Hamburg
Telefon: +49 40 23830770
E-Mail: [email protected]

3. Hosting, Content Delivery Network (CDN) und Server-Log-Dateien

Zur Bereitstellung, Absicherung und schnellen Auslieferung dieser Website setzen wir auf eine Kombination aus Webhosting und einem vorgeschalteten Content Delivery Network (CDN):

a) DNS und Content Delivery Network (Cloudflare)
Wir nutzen den DNS-Dienst sowie das globale Content Delivery Network der Cloudflare, Inc., 101 Townsend St, San Francisco, CA 94107, USA. Der Datenverkehr zwischen Ihrem Browser und unserem Webserver wird über das globale Netzwerk von Cloudflare geroutet (Reverse Proxy). Dies dient dem Schutz vor DDoS-Angriffen, der Ausfallsicherheit sowie der Optimierung der Ladezeiten. Cloudflare verarbeitet dabei technisch bedingt IP-Adressen und Metadaten der Verbindungsanfragen. Die Nutzung erfolgt auf Grundlage unseres berechtigten Interesses an der Sicherheit, Stabilität und performanten Bereitstellung unseres Onlineangebots gemäß Art. 6 Abs. 1 lit. f DSGVO. Mit Cloudflare besteht ein Auftragsverarbeitungsvertrag (Data Processing Addendum) auf Basis der EU-Standardvertragsklauseln; Cloudflare ist zudem unter dem EU-U.S. Data Privacy Framework zertifiziert.

b) Webhosting und Server-Log-Dateien (IONOS)
Unser Webserver (Origin-Server) wird von der IONOS SE, Elgendorfer Str. 57, 56410 Montabaur, betrieben. Beim Zugriff auf unsere Website erfasst der Webserver automatisch Informationen in sogenannten Server-Log-Dateien, die technisch übermittelt werden:

Die Speicherung dieser Daten erfolgt auf Grundlage von Art. 6 Abs. 1 lit. f DSGVO zur Gewährleistung eines reibungslosen Verbindungsaufbaus und der technischen Betriebssicherheit des Servers. Eine Zusammenführung dieser Daten mit anderen Datenquellen findet nicht statt.

4. Webanalyse (Cloudflare Web Analytics)

Wir nutzen auf unserer Website den datenschutzfreundlichen Webanalysedienst Cloudflare Web Analytics der Cloudflare, Inc., 101 Townsend St, San Francisco, CA 94107, USA.

Vollständig cookiefreie Messung: Cloudflare Web Analytics verwendet keine Cookies und greift nicht auf den lokalen Speicher (Local Storage / Session Storage) Ihres Endgeräts zu. Die Messung von Seitenaufrufen, Verweildauer und aggregierten Leistungsdaten erfolgt ohne Speicherung von IP-Adressen oder die Erstellung von Nutzerprofilen. Ein websiteübergreifendes Tracking (Cross-Site Tracking) findet nicht statt. Eine Einwilligung nach § 25 Abs. 1 TDDDG ist daher nicht erforderlich.

Rechtsgrundlage: Die Verarbeitung erfolgt auf Grundlage unseres berechtigten Interesses an einer anonymen, datensparsamen Reichweitenanalyse und der technischen Optimierung unseres Angebots gemäß Art. 6 Abs. 1 lit. f DSGVO.

Auftragsverarbeitung & Drittlandübermittlung: Wir haben mit Cloudflare einen Vertrag zur Auftragsverarbeitung (Data Processing Addendum) auf Basis der Standardvertragsklauseln der EU-Kommission abgeschlossen. Cloudflare ist unter dem EU-U.S. Data Privacy Framework zertifiziert.

5. Kontaktaufnahme

Wenn Sie per E-Mail, Telefon oder über sonstigen Weg Kontakt aufnehmen, wird Ihre Anfrage inklusive aller daraus hervorgehenden personenbezogenen Daten zum Zwecke der Bearbeitung Ihres Anliegens gespeichert und verarbeitet. Die Datenverarbeitung erfolgt auf Grundlage von Art. 6 Abs. 1 lit. b DSGVO (sofern Ihre Anfrage mit der Erfüllung eines Vertrags zusammenhängt oder zur Durchführung vorvertraglicher Maßnahmen erforderlich ist) bzw. im Übrigen auf Grundlage unseres berechtigten Interesses an der effektiven Bearbeitung der an uns gerichteten Anfragen (Art. 6 Abs. 1 lit. f DSGVO).

E-Mail-Dienst (Google Workspace): Für die Abwicklung des E-Mail-Verkehrs nutzen wir die Dienste von Google Workspace (Google Ireland Limited, Gordon House, Barrow Street, Dublin 4, Irland). Mit Google wurde ein entsprechender Vertrag zur Auftragsverarbeitung gemäß Art. 28 DSGVO abgeschlossen.

Telefonie (Easybell): Für die telefonische Erreichbarkeit nutzen wir die Telekommunikationsdienste der easybell GmbH (Brückenstraße 5a, 10179 Berlin). Die Verarbeitung von Verbindungsdaten erfolgt zur Gewährleistung der Telekommunikation gemäß den geltenden gesetzlichen Bestimmungen.

Die von Ihnen an uns übersandten Daten verbleiben bei uns, bis Sie uns zur Löschung auffordern, Ihre Einwilligung zur Speicherung widerrufen oder der Zweck für die Datenspeicherung entfällt (z. B. nach abgeschlossener Bearbeitung Ihres Anliegens). Zwingende gesetzliche Bestimmungen – insbesondere gesetzliche Aufbewahrungsfristen – bleiben unberührt.

6. Lokale Systemschriften (Keine externen Webfonts)

Diese Präsenz verzichtet vollständig auf externe CDNs für Schriften (wie Google Fonts oder Adobe Fonts). Alle Schriften werden lokal über die Systemschriftarten Ihres Endgeräts gerendert. Es erfolgt keine Übermittlung Ihrer IP-Adresse an externe Schriftarten-Server.

7. Ihre Rechte

Sie haben jederzeit das Recht auf unentgeltliche Auskunft über Ihre gespeicherten personenbezogenen Daten, deren Herkunft und Empfänger und den Zweck der Datenverarbeitung sowie ein Recht auf Berichtigung, Sperrung oder Löschung dieser Daten. Ihnen steht zudem ein Beschwerderecht bei der zuständigen Datenschutz-Aufsichtsbehörde zu. Hierzu sowie zu weiteren Fragen zum Datenschutz können Sie sich jederzeit an die unter Punkt 2 angegebene Adresse wenden.

Legal Notice

Information pursuant to Section 5 of the German Digital Services Act (DDG)

Erik Wiedenhöft
Senior Interim Executive
Am Sandtorkai 58
20457 Hamburg
Germany

Contact

Phone: +49 40 23830770
Email: [email protected]

Legal Form

Sole Proprietorship (Independent / freelance executive advisory services)

VAT Identification Number

Value added tax identification number pursuant to Section 27a of the German VAT Act (UStG):
DE 305962047

Regulatory Notice & Scope Exclusion (§ 33 StBerG / RDG)

Services provided on this website are strictly limited to corporate interim management and management consulting. Regulated tax advisory services within the meaning of reserved activities under Section 33 of the German Tax Advisory Act (StBerG) – specifically statutory tax advice, the preparation of tax returns, and the compilation of tax balance sheets – as well as legal services under the German Legal Services Act (RDG) are strictly excluded and are not rendered.

Liability for Content

As a service provider, we are responsible for our own content on these pages pursuant to Section 7 (1) DDG in accordance with general statutory legislation. Pursuant to Sections 8 through 10 DDG, however, we are not obligated to monitor transmitted or stored external information or to investigate circumstances that indicate unlawful activity.

Privacy Policy

1. Privacy at a Glance

Protecting your personal data is our utmost priority. This website is engineered strictly as a static corporate presence. We do not use cookies, nor do we employ commercial tracking engines or load third-party scripts or fonts.

2. Controller

Erik Wiedenhöft
Am Sandtorkai 58
20457 Hamburg, Germany
Phone: +49 40 23830770
Email: [email protected]

3. Hosting, Content Delivery Network (CDN) & Server Log Files

To ensure high availability, fast loading times, and technical protection against cyber threats, we employ web hosting combined with an upstream Content Delivery Network (CDN):

a) DNS & Content Delivery Network (Cloudflare)
We utilize DNS routing and the global Content Delivery Network provided by Cloudflare, Inc., 101 Townsend St, San Francisco, CA 94107, USA. Traffic between your browser and our origin server is routed through Cloudflare's global edge infrastructure (Reverse Proxy). This serves to mitigate DDoS attacks, guarantee system availability, and improve response latencies. In this process, connection metadata and IP addresses are processed temporarily. Processing is grounded in our legitimate interest in maintaining site security, technical stability, and performance pursuant to Art. 6(1)(f) GDPR. A Data Processing Addendum (DPA) incorporating EU Standard Contractual Clauses is executed with Cloudflare, and Cloudflare is certified under the EU-U.S. Data Privacy Framework.

b) Web Hosting & Server Log Files (IONOS)
Our origin web server is operated by IONOS SE, Elgendorfer Str. 57, 56410 Montabaur, Germany. When accessing this website, the host automatically collects and stores connection details in server log files:

This data processing is based on Art. 6(1)(f) GDPR to preserve network integrity and server stability. These logs are not combined with other personal data sources.

4. Web Analytics (Cloudflare Web Analytics)

We utilize Cloudflare Web Analytics, provided by Cloudflare, Inc., 101 Townsend St, San Francisco, CA 94107, USA.

Cookieless Telemetry: Cloudflare Web Analytics does not set cookies and does not access the local storage (Local Storage or Session Storage) of your device. Page metrics and performance indicators are processed without logging IP addresses or creating user profiles. Cross-site tracking is not conducted. Consequently, user consent under § 25(1) TDDDG / ePrivacy regulations is not required.

Legal Basis: Data processing is conducted on the basis of our legitimate interest in anonymized, privacy-compliant traffic telemetry and site performance optimization pursuant to Art. 6(1)(f) GDPR.

Data Processing & Transfers: We have executed a Data Processing Addendum (DPA) incorporating the EU Standard Contractual Clauses with Cloudflare. Cloudflare is certified under the EU-U.S. Data Privacy Framework.

5. Contact Inquiries

If you contact us via email or telephone, your inquiry including all provided contact details will be stored for the purpose of processing the request and handling subsequent correspondence. This processing is based on Art. 6(1)(b) GDPR (pre-contractual measures) or Art. 6(1)(f) GDPR (legitimate interest in processing business communications). Your data will not be disclosed to third parties without your consent.

6. Local System Fonts (No External Webfonts)

This digital presence completely refrains from external CDNs, web fonts (such as Google Fonts), or third-party trackers. All typography renders natively via the local system font stack of your terminal device. Your IP address is never disclosed to external tracking providers.

7. Your Statutory Rights

You have the statutory right at any time to obtain free information about your stored personal data, its origin, recipients, and the purpose of data processing, as well as the right to rectification or erasure of such data. For inquiries regarding data protection, please contact the controller details listed above.