Question

Define cost of capital ? explain its various types and maritd​

Answer 1

Answer:

Cost of capital is the required return necessary to make a capital budgeting project, such as building a new factory, worthwhile. When analysts and investors discuss the cost of capital, they typically mean the weighted average of a firm's cost of debt and cost of equity blended together.

Some of the most important types of cost of capital are as follows: Cost of capital is defined in several ways: The minimum required rate of return that a project must earn, the cost of using fund in the firm, the cut-off rates for a capital expenditure or the target rate of return on investment.

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