The WACC calculated on the previous tab is good as long as no new financing is required, however if a firm does not have enough capital it must issue more. This then requires the calculation of the marginal WACC that includes flotation costs. For instance it does not matter the rate at which a bond was originally issued. However the WACC changes as we have to issue new forms of capital. As the text discusses with new stock or bond isseus we must factor in flotation costs. Using the information to the left to calculate the marginal WACC.

The WACC calculated on the previous tab is good as long as no new financing is required, however if a firm does not have enough capital it must issue more. This then requires the calculation of the marginal WACC that includes flotation costs. For instance it does not matter the rate at which a bond was originally issued. However the WACC changes as we have to issue new forms of capital. As the text discusses with new stock or ond isseus we must factor in flotation costs. sing the information to the left to calculate the marginal WACC