Practical problems with the marginal cost of capital. Costs of the firm's most recent security issued. Yields on the firm's securities that are most like what would be issued. Yields on securities most similar to the firm's. Caveats Different estimates result from using different methods of estimating costs.
Different estimates result from using different weights of capital usage.
Flotation costs must be considered in the calculations. Possible breakpoints must be considered in the calculations. An address by Professor Rene' M. Stulz, Ohio State University. Utilities Cost of Capital A paper by Roger Morin discussing the cost of capital for utilities.