cost of capital
noun[S]
ukusECONOMICS,FINANCE
theamountofmoneythat acompanymustpayout individendsto itshareholders, and ininterestonbondsand otherloans:
British biotechs nowfindthemselves with lessflexibilityand ahighercostofcapital.
Determining thecostofcapitalallowsyou tocalculatewhatreturnoninvestmentisnecessarytocompensateyou for theriskyou are taking.