Distinguish between Weighted average cost of capital and marginal cost of capital.

CPA-Financial-Management-Section-3 Revision kit

WACC
– The overall or composite cost of existing capital from various sources based on % cost and market value weights.
– MCC – overall or composite cost of new or additional capital based on % cost of new capital and weight based on amount from each source relative to total new capital.

Leave a Reply

Your email address will not be published. Required fields are marked *