Cost of Capital

The ‘cost’ to a company to acquire investment is the same number as the return private investors expect before they’ll invest money.
The cost of capital can also refer to the cost of purchasing assets for the company.
If private investors are unwilling to invest in something that has wide public benefits (i.e. the cost of capital is too high) government investment can fill the gap.
Example:
If building renewable energy generation doesn’t have a return of at least the cost of capital, then private investors won’t invest in it.
Visual idea: A seesaw balancing “risk” and “return.”