WACC (Weighted Average Cost of Capital)

The blended cost of all the capital sources funding a deal — debt and equity — weighted by their proportion of the total capital stack.

WACC matters because it's the discount rate against which a deal's projected returns are typically judged: a deal only creates value if its return exceeds its cost of capital. Changing any single tranche's rate or size shifts the blended WACC for the whole stack, not just that tranche.