Conecto

Work out the WACC

valuation_wacc

Read-onlyIdempotent

The cost of capital: CAPM cost of equity from the risk-free rate, the equity risk premium and a beta (given levered, given unlevered, or from peers, each unlevered at its own debt to equity and the median or mean relevered at the target's), plus any premiums; the cost of debt after tax; and the WACC at the target capital structure. Hamada (with the tax shield) or Harris-Pringle. Each step is written out. valuation_rates gives today's risk-free rates. Free.

Tool call template

Replace each placeholder with a value matching the input schema. Only required parameters are included; add optional parameters as needed.

{
  "id": 1,
  "jsonrpc": "2.0",
  "method": "tools/call",
  "params": {
    "arguments": {
      "risk_free_rate": "<risk_free_rate>",
      "equity_risk_premium": "<equity_risk_premium>",
      "tax_rate": "<tax_rate>",
      "pre_tax_cost_of_debt": "<pre_tax_cost_of_debt>"
    },
    "name": "valuation_wacc"
  }
}

Input Schema

Name	Required	Description	Default
`peers`	No
`tax_rate`	Yes	The target's tax rate. A decimal: 0.09 is 9%.
`debt_beta`	No
`relevering`	No		hamada
`levered_beta`	No	Use this beta as it is.
`size_premium`	No	Added to the cost of equity. A decimal: 0.09 is 9%.
`other_premium`	No	Any other premium added to the cost of equity. A decimal: 0.09 is 9%.
`peer_statistic`	No		median
`risk_free_rate`	Yes	The risk-free rate. A decimal: 0.09 is 9%.
`unlevered_beta`	No	Relevered at the target capital structure.
`target_debt_weight`	No	Debt / (debt + equity). A decimal: 0.09 is 9%.
`equity_risk_premium`	Yes	The market risk premium. A decimal: 0.09 is 9%.
`country_risk_premium`	No	Added to the cost of equity. A decimal: 0.09 is 9%.
`pre_tax_cost_of_debt`	Yes	What the target pays on debt, before tax. A decimal: 0.09 is 9%.
`target_debt_to_equity`	No	Debt / equity at the target capital structure. Or give target_debt_weight.

Schema Changelog

Changes observed during successful MCP inspections.

First observedOct 28, 2026

TDQS

A4/5.0

Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

The annotations already establish that this is a read-only, idempotent, non-destructive computation. The description adds substantial behavioral context: it explains the CAPM build-up, the three beta input modes, peer unlevering/relevering, premium handling, after-tax debt, Hamada vs Harris-Pringle relevering, and that each step is written out.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The description front-loads the purpose ('The cost of capital') and is appropriately sized for a multi-step financial calculation. The first sentence is dense and run-on, but most clauses carry useful meaning and there is little outright waste.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness4/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a 15-parameter computation tool with no output schema, the description covers the methodology and primary input relationships well. It partially addresses output by saying each step is written out, but it does not describe the return structure in detail or cover every edge case, leaving a modest completeness gap.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 73%, so many parameters are already documented. The description adds meaning beyond the schema by explaining how levered, unlevered, and peer betas relate to target leverage, how peers are unlevered and relevered using median or mean, and how premiums and after-tax debt feed the WACC. It does not cover every parameter, such as debt_beta, but it substantially clarifies the core inputs.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose4/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description states a specific computation: CAPM cost of equity, after-tax cost of debt, and WACC at the target capital structure. It is clearly a WACC calculator, but it does not explicitly distinguish itself from sibling valuation tools such as valuation_beta or valuation_dcf beyond mentioning valuation_rates for risk-free rates.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines3/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Usage is implied by the calculation described, and the note that valuation_rates supplies today's risk-free rates is helpful input guidance. However, the description does not explicitly say when to choose this tool over valuation_beta, valuation_dcf, or other valuation siblings, nor does it state exclusions.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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