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Conceptual difference between marginal cost of capital and weighted average cost of capital?

In: Investing and Financial Markets, Business Finance, Masters of Business Administration MBA [Edit categories]

Answer:

WACC is the total average cost of capital to company which is calculated by taking into account the weights of all type of capital existed at a particular date in the capital structure of the company (Equity, Debt, bonds, debentures etc).

while the MCC is the incremental cost of capital which comes into existence when fresh capital is raised. It will depend on the type of capital raised, its weight and its cost.

First answer by ID1141020982. Last edit by Mshoaib3. Contributor trust: 0 [recommend contributor ]. Question popularity: 39 [recommend question].

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