Weighted Average Cost Of Capital
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It's the blended average rate a company is expected to pay to finance its assets, combining the cost of equity and the after-tax cost of debt, each weighted by their proportion of the company's total capital structure.

Interest payments on debt are typically tax-deductible, which lowers the effective cost of debt to the company, while dividends and equity returns are paid from after-tax profits and receive no such deduction, so no tax adjustment applies there.

It's commonly used as the discount rate in valuation models like discounted cash flow analysis, and as a hurdle rate: a project or investment is generally considered worthwhile only if its expected return exceeds the company's WACC.

While debt is often cheaper than equity due to the tax shield, too much debt increases financial risk, which raises the required return on both debt and equity, so beyond a certain point additional leverage can push WACC back up.

Yes, it shifts as a company's capital structure, credit risk, market interest rates, or investor return expectations change, so it should be recalculated periodically rather than treated as a fixed, permanent figure.