Default risk, Inflation, Interest rate risk.

The default risk is the potential that the borrower will not be able to pay back a loan, or any other financial obligations. This can affect all three sources of funding as it reduces the money available to invest while creditors try to recover their funds. This could increase WACC due to higher interest rates being charged in order compensate for any losses incurred—which may limit opportunities or require additional debt funding if necessary.

The inflation rate affects the purchasing power of all financing types by decreasing over time. What you buy right now could cost more in the future. This can lead to an increase in business costs, and even WACC (if funding remains stagnant).

Finally, interest rate risk is associated with changes occurring in borrowing/lending markets—which can have an effect on both equity and debt investments. WACC is usually lower when rates decrease, while increases have the opposite impact. Volatility can create uncertainty in calculating capital costs or making future projections. In summary then default risk, inflation and interest rate risk are all potential issues which should be taken into consideration when determining weighted average cost of capital—as they can have varying degrees of influence depending on current market conditions.