Composite Cost Of Capital

It's a composite. Like one of those fancy metal combines that allow an F16 fighter jet to weigh 13 pounds.

When companies need to raise money, to uh...do stuff, they raise that money in a Baskin Robbins-like set of 31-ish flavors. They can sell equity, they can sell debt, they can advance sale years' worth of production capacity. They can sell warrants, rights, options, and other derivative instruments as well. But at the end of the day, there is a cost to raising that money for the company, and the catchy catchphrase describing this adventure is "capital structure."

The more famous brethren term is Weighted Average Cost of Capital, or WACC, which reflects some discounted present valuation of the cost of all of those flavors of capital raise that went into the financial soup. Let's hope the $100M price tag for that whoopee cushion factory was worth it.