Incremental cost of capital

(redirected from Marginal cost of funds)

Incremental cost of capital

Average cost applicable to the issue of each additional unit of debt and equity.

Incremental Cost of Capital

The average cost to a company to issue one more unit of debt or equity. The incremental cost of capital varies according to how many more or fewer units a company wishes to issue. See also: Incremental cost.
References in periodicals archive ?
27) Assuming the two generations have the same number of people H and the same marginal cost of funds, by our criterion, the project should be accepted if and only if
52 into Expression 9 yields a marginal cost of funds MCF = 1.
Most analytical studies on the marginal cost of funds use a partial equilibrium framework (e.
18) The marginal (or small) project approach to cost--benefit analysis is emphasized by Dreze and Stem (1987) and followed by all studies in the marginal cost of funds literature and most studies in the SDR literature.
22) In the static literature of the marginal cost of funds, two alternative approaches have been proposed to address the "feedback revenue effects" of public projects.
With lump-sum financing, the marginal cost of funds, [[MCF.
alpha]]], is commonly referenced in the existing marginal cost of funds literature.
2], the proper measure of the marginal cost of funds is [MCF.
Ananda Bhoumik, senior director, banks, India Ratings, says, "The recommendation that banks compute their lending rate based on their marginal cost of funds and not on the weighted average cost could increase the volatility of the base rate, particularly for banks with higher dependence on bulk short-term deposits.
Liu (2003) summarizes the practical difficulties of the existing views and proposes a new approach to the discount rate issue that is based on the (multiperiod) concept of the marginal cost of funds.
A marginal cost of funds approach to multi-period public project evaluation: Implications for the social discount rate.
For a reconciliation of divergent marginal cost of fund estimates that are based on the nature of public goods, see Wildasin (1984), Mayshar (1991), Ballard and Fullerton (1992), and Snow and Warren (1996).