What is the cost of capital?

What is the cost of capital?
Lachlan May-04-2023 07:30:42
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Cost of capital is an economic concept that refers to the rate of return that the owners of a business, or investors, require in order to invest in the company. It is expressed as either an interest rate or as a percentage of the total amount of capital invested. The overall cost of capital helps to determine whether or not a business idea or venture is viable financially, since any project must generally generate a return greater than the cost of capital in order for it to be profitable.
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answered 22 Aug 2023

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