marginal cost of capital


The cost associated with raising one additional dollar of capital. The marginal cost will vary according to the type of capital used. For example, raising funds through the use of unsecured or subordinated debt, or through debt that requires higher interest rates to offset risk, will be more expensive than debt that is backed by collateral, such as a secured bond.

Related Terms

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
marginal cost hurdle rate