Will WACC be higher for a $5 billion company or a $500 million company?

• Whichever holds more cash, since a larger cash balance mechanically lowers the cost of equity
• They tend to be equal, because WACC reflects the sector and market rather than a company's size
• The $5 billion company, since carrying a larger absolute debt load lifts its blended cost of capital
• Usually the $500 million company, whose size and liquidity risk premium raises its cost of capital
• The $5 billion company, as bigger firms take on more systematic risk and therefore a higher beta