marginal cost of capital

marginal cost of capital definition - business

marginal cost of capital

The cost to a company of raising additional funds. The marginal cost of capital depends on the current cost of individual sources of capital (common stock, retained earnings, preferred stock, and debt) and the proportions in which the sources will be used. This cost is stated as a percentage and is compared to the return that is expected to be earned on a proposed investment.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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