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By taking into account of capital structure, WACC is a very pratical way to measure the current status of a firm's positions in money markets. WACC stands for Weighted Average Cost of Capital. It is a calculation used by companies to determine the minimum return they need to earn on their investments in order to satisfy their investors. WACC takes into account the cost of both debt and equity capital, as well as the proportion of each that the company uses to finance its operations. Essentially, it is the average rate of return that a company must pay to all of its investors, weighted by the proportion of each type of capital. WACC can be used as a discount rate to determine the present value of future cash flows, which is useful for making investment decisions or evaluating the overall value of a company.