WACC

WACC and Marginal Cost of Capital (MCoC)

WACC and Marginal Cost of Capital (MCoC)

The weighted average cost of capital, or WACC, is the average cost of debt and equity financing that a company undertakes to finance its assets and operations. Its strength is that is is ideally, a mix of financing vehicles is used to create the lowest possible WACC. Companies must be aware that the more leverage that they undertake, the greater return that an investor will demand and the greater the interest rate that a debtor will require for the increased risk of default(Bennet, 2006).

There is said to be ...