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Annual

CCUSMA02RUA618N • Economic Data from Federal Reserve Economic Data (FRED)

Latest Value

92.88

Year-over-Year Change

199.16%

Date Range

1/1/1993 - 1/1/2024

Summary

The Annual Cost of Capital Measure tracks the estimated annual cost of capital for U.S. nonfinancial corporate businesses. It provides insights into the overall cost of financing for businesses.

Analysis & Context

This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.

Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.

About This Dataset

The Annual Cost of Capital Measure estimates the weighted average cost of capital, including both debt and equity financing, for U.S. nonfinancial corporate businesses. This metric is used by economists and analysts to assess the cost of capital faced by firms and monitor trends in corporate financing conditions.

Methodology

The data is calculated by the Federal Reserve based on a weighted average of debt and equity financing costs.

Historical Context

The annual cost of capital is an important indicator for policymakers and market participants in evaluating the health of the corporate sector and financing environment.

Key Facts

  • The annual cost of capital measure has ranged from 6% to 12% over the past two decades.
  • Fluctuations in the cost of capital can impact business investment and economic growth.
  • The cost of capital is a key input for firms' capital budgeting and valuation decisions.

FAQs

Q: What does this economic trend measure?

A: The Annual Cost of Capital Measure tracks the estimated weighted average cost of capital, including both debt and equity financing, for U.S. nonfinancial corporate businesses.

Q: Why is this trend relevant for users or analysts?

A: The cost of capital is a critical metric for evaluating the financing conditions and investment climate for businesses, making it relevant for economists, policymakers, and market participants.

Q: How is this data collected or calculated?

A: The data is calculated by the Federal Reserve based on a weighted average of debt and equity financing costs for U.S. nonfinancial corporations.

Q: How is this trend used in economic policy?

A: The annual cost of capital measure is used by policymakers and analysts to assess the overall health of the corporate sector and financing environment, which can inform decisions on monetary policy and economic growth strategies.

Q: Are there update delays or limitations?

A: The annual cost of capital data is released with a lag, and may not fully capture real-time changes in financing conditions for businesses.

Related Trends

Citation

U.S. Federal Reserve, Annual Cost of Capital Measure (CCUSMA02RUA618N), retrieved from FRED.