Which factor is NOT typically considered when calculating the WACC?

When calculating the Weighted Average Cost of Capital (WACC), the primary components that are considered include the cost of equity, the cost of debt, and the market value of equity. The WACC represents a firm's average cost of capital from all sources, weighted according to the proportion of equity and debt financing the company uses.

The cost of equity reflects the return required by equity investors, while the cost of debt is the effective rate the company pays on its borrowed funds. The market value of equity is used to determine the proportion of the company's funding that comes from equity, ensuring that the weights in the WACC calculation accurately represent the current valuation of the firm's financing structure.

The return on assets, however, is not a direct component in the WACC calculation. Instead, the return on assets is a measure of a company’s profitability and efficiency in using its assets to generate earnings, which is typically analyzed separately from the WACC. Thus, it does not factor into the calculation of the WACC, reinforcing that this is the correct choice for the element not typically considered when determining a firm's weighted average cost of capital.