Today, marginal cost analysis remains a cornerstone of microeconomic theory and business strategy. Marginal cost differs significantly from other cost metrics, such as average cost and fixed cost.

The CAPM formula is: Cost of Equity (CAPM) = Risk-Free Rate of Return + Beta × (Market Rate of Return – Risk-Free Rate of Return) For example ... role in the weighted average cost of capital ...

Weighted average cost of capital (WACC ... Conversely, a lower WACC signals relatively low financing cost and less risk. "The formula uses the cost of each of the sources of capital and weighs ...

To maximize profits, a company will increase production until marginal revenue equals marginal cost ... for example, the average increase per unit from 100 units to 150 units. The formula for ...