The Cost of Capital Is High

The most straightforward is interest rates.

When you deposit money in a bank, the bank pays you interest. When you take out a mortgage to buy a house, you pay interest to the bank. Over a 30-year loan term, the interest equals the principal—on a $200,000 mortgage, you repay $400,000 in total ($200,000 principal plus $200,000 interest). This already represents the lowest cost of capital.