[Verse 1]
When a company needs to raise some cash
They look at debt and equity to last
But here's the thing that you should know
As funding needs begin to grow
The cost of capital starts to climb
Following a pattern every time
[Chorus]
Marginal cost curve going up
More money means the price goes up
Break points hit when cheap funds run dry
MCC curve starts reaching high
Step by step the costs increase
Marginal funding finds no peace
[Verse 2]
Start with retained earnings first in line
They're cheapest funds you'll ever find
Then debt comes next at moderate rate
But limits make the cost escalate
When cheap debt's gone, expensive appears
The break point shift becomes quite clear
[Chorus]
Marginal cost curve going up
More money means the price goes up
Break points hit when cheap funds run dry
MCC curve starts reaching high
Step by step the costs increase
Marginal funding finds no peace
[Bridge]
Plot the curve on your chart today
X-axis shows the funding way
Y-axis holds the cost so true
Each step up brings a different view
Weighted average climbs each tier
As financing sources disappear
[Verse 3]
New equity's the highest cost
When other options have been lost
The curve resembles stairs that climb
Each break point marking funding time
This MCC helps decisions flow
Which projects get the green to go
[Chorus]
Marginal cost curve going up
More money means the price goes up
Break points hit when cheap funds run dry
MCC curve starts reaching high
Step by step the costs increase
Marginal funding finds no peace
[Outro]
Remember when you analyze
The marginal cost will always rise
Use the curve to guide your way
Smart financing saves the day