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#cfa-level-1 #corporate-finance #reading-36-cost-of-capital
The WACC is also referred to as the marginal cost of capital (MCC) because it is the cost that a company incurs for additional capital.
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2. COST OF CAPITAL
s required rate of return is to calculate the marginal cost of each of the various sources of capital and then calculate a weighted average of these costs. This weighted average is referred to as the weighted average cost of capital (WACC). <span>The WACC is also referred to as the marginal cost of capital (MCC) because it is the cost that a company incurs for additional capital. The weights in this weighted average are the proportions of the various sources of capital that the company uses to support its investment program. Therefore, the WACC, in its most gene


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