Question

    Firm's Cost of Capital is the average cost

    of:
    A All sources of finance Correct Answer Incorrect Answer
    B All Borrowings Correct Answer Incorrect Answer
    C All share capital Correct Answer Incorrect Answer
    D All Bonds & Debentures Correct Answer Incorrect Answer
    E None of the Above Correct Answer Incorrect Answer

    Solution

    The cost of capital is the rate of return that a company must earn on its investments to maintain the value of its stock price and satisfy the expectations of its investors. It represents the average cost of all sources of financing that a company uses to raise capital, including debt, equity, and any other financial instruments.

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