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wacc vs marginal cost of capital

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › wacc vs marginal cost of capital

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by AvatarJohn Moffat.
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  • December 5, 2017 at 4:29 pm #420725
    Avatarsharon234
    Member
    • Topics: 4
    • Replies: 0
    • ☆

    is wacc and marginal cost of capital the same? do they have the same formula?

    December 5, 2017 at 9:33 pm #420804
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54848
    • ☆☆☆☆☆

    No – they are not the same (unless the level of gearing and the level of business risk both remain the same).

    However you are only asked to calculate the WACC in the exam – not the marginal cost of capital.

    I do explain this in my free lectures. The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.

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