cost of capital
noun · n
Simple meaning
The opportunity cost of the funds use as the result of an investment decision.
Pronunciation
Say it like this:
kahstuhvkapuhtuhlSay the bold part a little louder.
IPA pronunciation (US)
ˈkɑstəvkæpətəl
This word is pronounced essentially the same in American and British English, so one transcription covers both.
IPA (International Phonetic Alphabet) is a standard way of writing speech sounds.
Definition
Everyday modern meanings first, grouped by part of speech.
noun
The opportunity cost of the funds employed as the result of an investment decision; the rate of return that a business could earn if it chose another investment with equivalent risk
n
In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities".
Word Aura™
How this word commonly comes across.
Aura for this meaning
This meaning: The opportunity cost of the funds employed as the result of an investment decision; the rate of return that a business could earn if it chose another investment with equivalent risk
Used this way, cost of capital is a specialist word that usually carries little praise or criticism of its own. It turns up most in business or professional and finance or economics contexts.
- Emotional tone
- Neutral
- Formality
- Specialist/technical
- Intensity
- Not strongly marked
- How common
- Specialized
- Connotation
- Clinical and technical
- Usage feel
- Technical and specialized
Where it naturally appears
- Business/professional
- Finance/economics
Usage note
In general conversation this sense usually needs explaining — outside its field, people reach for a plainer word.
Word Aura describes common impressions, not a measurement. Tone changes with sentence, speaker, relationship and situation.
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Dictionary data from Wiktionary via the Free Dictionary API. Simple meanings, combinations and word intelligence are built from verified reference data, no AI is used to load this page.