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 ?
Summary: New Delhi [India], March 01 (ANI): The Punjab National Bank (PNB) on Thursday increased its Marginal Cost of Funds Based Lending Rate (MCLR) by 15 bps, with immediate effect.
NS) has increased its benchmark marginal cost of funds based lending rate (MCLR) by 10 basis points in the three-month to three-year tenures effective from February 17, 2018, The Economic Times has reported citing a regulatory filing from the bank.
Reserve Bank introduced the Marginal Cost of Funds based Lending Rates (MCLR) system with effect from April 1, 2016 on account of the limitations of the Base Rate regime.
Further, borrowers can also choose to link their home loans with Marginal Cost of funds based Lending rate MCLR- 6 Months or IMCLR- 1 Year.
While they take into account the average cost of all funds raised by them, the RBI wants them to use the marginal cost of funds, that is, the rate they pay for new deposits or borrowings.
The group has also suggested that banks move towards a new system of computing the base rate on the basis of marginal cost of funds instead of the present system of using the weighted average cost of funds.
1) They are important for the propagation of those shocks since they affect the marginal cost of funds faced by some set of agents in the economy.
We begin by explaining what the marginal cost of funds means and how it can be used to evaluate tax policies and public expenditure programs.
In the current environment there is a time gap between the reduction in the marginal cost of funds and the portfolio cost.
The government should optimize along all these boundaries by setting the marginal benefit equal for each of them (and equal to the marginal cost of funds for other sources of revenue).
While the appropriate discount rates to use will not change with the tax structure or the marginal tax instrument in Liu (2003), the marginal cost of funds parameter in Liu's rule is determined by the tax structure and the marginal tax instrument.
To determine the marginal cost of government spending, we multiply the direct resource cost of the expenditure by a term generally referred to as the marginal cost of funds (MCF).