How Do You Spell CAPITAL CHARGE?

Pronunciation: [kˈapɪtə͡l t͡ʃˈɑːd͡ʒ] (IPA)

Capital charge is a technical term used in finance to refer to the amount of capital that a bank or financial institution holds as a buffer against potential losses. The word "capital" is pronounced /ˈkæpɪtl/ with stress on the first syllable, and "charge" is pronounced /tʃɑːrdʒ/ with stress on the second syllable. The combination of the two words is pronounced /ˈkæpɪtl tʃɑːrdʒ/, with the primary stress on the first syllable of "capital" and secondary stress on the second syllable of "charge".

CAPITAL CHARGE Meaning and Definition

1. Capital charge refers to the cost incurred by a company for utilizing capital or investment funds in its various business operations or projects. It is the amount a company pays to compensate the providers of capital for the risk associated with their investment. The capital charge accounts for the opportunity cost of investing capital in a particular venture, as well as the risk of not being able to recover the full amount invested.

   The capital charge is calculated based on the weighted average cost of capital (WACC), which considers both the cost of debt and the cost of equity. It is commonly expressed as a percentage or annual rate. Companies determine their capital charge to assess the financial viability of potential projects and to make informed investment decisions.

   The capital charge reflects the company's dependence on external financing sources and the risk associated with those sources. A company with a higher capital charge will generally have limited access to funds and may need to generate higher returns to compensate for the risk taken by investors. Conversely, a company with a lower capital charge may have easy access to capital at a lower cost, allowing for more investment opportunities.

   In summary, capital charge represents the cost associated with utilizing capital for various business activities. It helps companies evaluate the financial feasibility of projects and serves as a measure of risk and returns associated with their investment decisions.

Common Misspellings for CAPITAL CHARGE

• xapital charge
• vapital charge
• fapital charge
• dapital charge
• czpital charge
• cspital charge
• cwpital charge
• cqpital charge
• caoital charge
• calital charge
• ca0ital charge
• caputal charge
• capjtal charge
• capktal charge
• capotal charge
• cap9tal charge
• cap8tal charge
• capiral charge
• capifal charge
• capigal charge

Etymology of CAPITAL CHARGE

The term "capital charge" has an etymology related to its use in legal and financial contexts.

The word "capital" in this context refers to a sum of money or financial assets that a person or organization possesses or invests. It has its roots in the Latin word "caput", meaning "head" or "main" as in the "principal sum".

The term "charge" refers to an amount of money that an individual or entity owes or is required to pay. It is derived from the Old French word "chargier", meaning "to load" or "to burden".

In the legal and financial world, a "capital charge" can refer to various things depending on the specific context. For example, it can be used to describe the cost of capital associated with obtaining financing or the fees and expenses imposed by a financial institution for managing an investment portfolio.

Plural form of CAPITAL CHARGE is CAPITAL CHARGES