Incremental Cost Of Capital

See: WACC. See: Weighted Average Cost of Capital.

Well, the "incremental" piece here usually refers to that lassssst piece of debt or equity that had to be sold to fund a given project or put a company "over the top," meaning...enough capital to get them profitable, or at least break-even in their core business.

A company might fund itself with debt, as much as possible, because it thinks its equity will be Google-valuable. So the most senior bonds it sells cost 5% a year; the next level junior bonds cost 7%. Yada yada yada. And then that last $25 million they really needed for the lobby statues and fountain with live koi in it...well, that last or incremental cost of capital cost the company 11% a year to rent. So yeah, expensive. But wow, those statues were nice. And the koi speak four languages, not including "fish." Gloop gloop.