Marginal cost of capital (MCC) is the rate calculated based on the same formula as WACC, but compared to WACC considers both the existing capital finance as well as all the effects of undertaking the project.
Therefore, there are two adjustments to traditional WACC to obtain MCC
- recalculate the cost of equity using new parameters
- use the new market (or book) values of equity that includes both the original new funds
- include to calculation formula new debts and their cost of debt