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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
| 14 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.
| 14 years ago. Rating: 0 | |
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