2012 CFA Level 1 Video Cost of Capital part 1.mp4

[kn0wled9e]

Good Video. Thanks a lot. I have one doubt abt the tax rate impacting the cost of capital. Do u have any video specifically on that or is there any other website. Thanks.

[arifirfanullah]

MCC is the cost of additional capital and NOT the change in cost of of capital. Hence using 14% when the cost of capital goes up is correct.

[smosqueiraumd]

In minute 2:31 you say that the MCC is 14% but if it went from 12% to 14% shouldn't the MCC be 2% (the additional cost given a unit increase in capital). Thank you!

BTW your videos are pretty good!

[MusafirHoonYaro]

@smosqueiraumd - the cost of raising an extra $ is the MCC, which in this case is 14%, i.e., you are paying $0.14 on the additional $ borrowed. So, Mr. Irfanullah has stated correctly.