To calculate the WACC, it is also necessary to know the cost of debt, and this is not simply the interest rate. Essentially, the interest rate and the cost of debt are equal only for risk-free loans. Since an organization always carries default risk, the cost of debt depends on the probability of default and the ability to recover in the event of default. I have detailed this in other notes, so I will not continue here. (See here)
One method of calculating the cost of debt is by using a modified form of the CAPM, which I have also described in another note and will not elaborate on here. (See here)
Additionally, the cost of debt can be calculated using ratings and default spreads. If we take the risk-free rate and add the default spread calculated based on the debt rating, we get the cost of debt. You can find a statistical table here:
Moreover, the country’s default spread is also added when the debt does not belong to the US. You can find the default spreads for countries here:
Link to country default spreads
Equity Risk Premiums – by Aswath Damodaran