Capital charge rate

Definition:

. The capital charge is the cost of capital times the amount of invested capital. This capital charge is a dollar amount. By capital charge rate is just the cost of capital. In other words, the capital charge rate is the rate or return required on invested capital.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Bundling, unbundling

Creation of securities either by combining primitive and derivative securities into one composite hybrid or by separating returns on an asset into classes.

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