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The cost of capital is a term used in the field of financial investment to refer to the cost of a company's funds (both debt and equity)
http://en.wikipedia.org/wiki/Cost_of_capital
12 years ago. Rating: 1 | |
Definition
The opportunity cost of an investment; that is, the rate of return that a company would otherwise be able to earn at the same risk level as the investment that has been selected. For example, when an investor purchases stock in a company, he/she expects to see a return on that investment. Since the individual expects to get back more than his/her initial investment, the cost of capital is equal to this return that the investor receives, or the money that the company misses out on by selling its stock.
12 years ago. Rating: 0 | |
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