StockYanThe meaning
WACC stands for Weighted Average Cost of Capital. In finance textbooks it means a company's cost of money. In the Nepal share market, people use it for something simpler: your average buying cost per share.
It is weighted because bigger purchases count more than smaller ones.
How to work it out
Add up what you paid for every purchase of one stock, then divide by the total number of shares.
- Cost of each buy = units × price
- Total cost = all buys added together
- WACC = total cost ÷ total units
Why it matters
Your profit, and so your capital gains tax, is worked out from your cost. If the cost on record is wrong, the tax can be wrong too.
That is why MeroShare has a section to record where and at what price you bought your shares.
Including fees
Some people add buying commission and the SEBON fee to their cost. This gives a slightly higher WACC that matches the money that really left their bank account.
Selling part of a holding
When you sell some of your shares, the WACC of the shares you keep stays the same. Only buying more, or receiving bonus or right shares, changes it.
Averaging down
Buying more shares at a lower price brings your WACC down. This is called averaging down.
It lowers the price you need to break even. It also puts more of your money into the same stock, so think about how much one company should take up in your portfolio.
IPO and bonus shares
IPO shares cost the issue price you applied at. Bonus shares add to your share count without a market-price purchase, so they change your average.
The cost used for bonus shares follows tax rules, so check the figure on record in MeroShare.
A NEPSE example
Say you bought 100 shares of Nabil Bank (NABIL) at Rs 485, the low of its 52-week range, and later 100 more at Rs 542, its close on 27 Oct 2026.
Total cost before fees: Rs 48,500 + Rs 54,200 = Rs 1,02,700. Total shares: 200. WACC: Rs 1,02,700 ÷ 200 = Rs 513.50 per share.
If you include buying commission and the SEBON fee, the two buys cost Rs 1,03,068.87 in total, or Rs 515.34 per share.
With NABIL at Rs 542 and a WACC of Rs 513.50, each share shows a gain of Rs 28.50 before fees and tax.