Cost Of Capital
The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile. Cost of capital includes the cost of debt and the cost of equity. Investopedia Says:
The cost of capital determines how a company can raise money (through a stock issue, borrowing, or a mix of the two). This is the rate of return that a firm would receive if it invested in a different vehicle with similar risk. Related Terms:
Capital Budgeting
Cost Of Debt
Cost Of Equity
Opportunity Cost
Payback Period
Return On New Invested Capital - RONIC
Risk
Unlevered Cost Of Capital
Weighted Average Cost Of Capital - WACC
Weighted Average Cost of Equity - WACE |