Corporate finance: marginal cost of capital schedule

Aa Aa E. 8. Marginal cost of capital (MCC) schedule As a company raises more and more funds, the cost of those funds begins to rise. As this occurs, the weighted cost of each new dollar rises. This is called the marginal cost of capital. A graph that shows how the weighted average cost of capitalchanges as more new capital is raised by the firm is called the MCC (marginal cost of capital) schedule. Use the MCC schedule to complete the sentences that follow. Tool tip: Mouse over the points on the graph to see their coordinates. Percent 12 WACC 11.4% WACC 11.0% 11 WACC 10.6% 10 20 40 60 80 100 120 140 160 Dollars of new capital raised Clear A If this company raises $60M, its weighted average cost of capital is The break points in the MCC schedule occur at of newly raised capital