The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile. Cost of capital includes the cost of debt and the cost of equity.

explains 'Cost Of Capital'

The cost of capital determines how a company can raise money (through a stock issue, borrowing, or a mix of the two). This is the rate of return that a firm would receive if it invested in a different vehicle with similar risk.

About the Author

By Muhammad Atif Saeed on 20:45. Filed under c , Definitions . Follow any responses to the RSS 2.0. Leave a response