When you invest your money, you can expect a greater or smaller return on your investment, depending on the rate of return for the investment. You can determine the average percentage of return for all your investments by performing a weighted average of capital calculation, or WACC, on your investment portfolio. Similarly, businesses use WACCs to determine the return on their investments and set stock prices.
1. Check your investment portfolio to find out how much money is in each of your investment accounts and what the rate of return is for each account.
2. Multiply each investment account balance by its rate of return. For example, if you have an account with $15,000 and a 7 percent rate of return, multiply $15,000 x .07. After you have done this calculation for each investment account, add the results together.
3. Add the amounts you have in each investment account. For example, if you have $10,000 in one account, $15,000 in another, and $3,000 in a third, add these for a total of $28,000.
4. Divide your weighted accounts (your Step 2 amount) by your total account assets (your Step 3 amount) to get your WACC. Express it as a percentage or a decimal.
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