Q » What is cost of capital?
06 Dec, 2025
A » The cost of capital refers to the return rate that a company must earn on its investment projects to maintain its market value and attract funds. It represents the opportunity cost of using capital resources, combining the cost of debt and the cost of equity. Companies use the cost of capital as a benchmark to evaluate new projects, ensuring that returns exceed this cost to create shareholder value.
06 Dec, 2025
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