what is cost of capital and its types
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Cost of capital is defined as the financing costs a company has to pay when borrowing money, using equity financing, or selling bonds to fund a big project or investment. In each case, the cost of capital is expressed as an annual interest rate, such as 7%.
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The cost of capital is the cost of a company's funds (both debt and equity). In words of Solomon Erza “The cost of capital is the minimum required rate of earnings or the cut-off rate of expenditure”.
Based on this research, it appears that there are three types of capital in addition to financial capital that families want to keep in mind. They are: Human Capital, Cultural Capital, and Social Capital.
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