Meaning and Definition of Cost of Capital Assignment Help from

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Synopsis of the Subject:

Meaning and Definition of Cost of Capital Homework Help team assists a student to understand the subject in a detailed manner. Cost of capital can be defined as rates of all the returns that could be gained by taking similar risks. It has two concepts in which cost of capital can be defined; one on the view of the company and other is that of an investor.

  • From company point of view, it is cost of funds obtaining from debts or equity to support any investments. While from an investors point of view it is the needful return of any investment that a company has to deliver in order to be worthy for taking up the responsibility.
  • It is used to estimate new developments of a company as it is the minimum return the investors are expecting on what they have provided as capital to company.
  • Cost of capital can be named as the bench mark or goals that a company has to meet.

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