Meaning of Cost of Capital:
Cost of capital is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds.
Cost of capital is the required rate of return on its investments which belongs to equity, debt and retained earnings. If a firm fails to earn return at the expected rate, the market value of the shares will fall and it will result in the reduction of overall wealth of the shareholders.
Cost of capital is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds.
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Cost of capital is the required rate of return on its investments which belongs to equity, debt and retained earnings. If a firm fails to earn return at the expected rate, the market value of the shares will fall and it will result in the reduction of overall wealth of the shareholders.
Meaning of Cost of Capital
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