Terminology - Business - Cost of Capital

The opportunity cost of an investment; i e, the rate of return that a firm would otherwise be able to earn at the same risk level as the investment that has been selected.


For an example, when an investor purchases / trade stock in a firm, he / or she expects to see a return on that investment/trade. 

Since the individual expects to get back more than his / her initial investment / amount, the cost of capital is equal to this return that the investor/ trader receives, or  / the money that the firm misses out on by selling its stock.
Share:

No comments:

Post a Comment

Popular Posts

Blog Archive

Recent Posts

Featured Post

India Share Market Trading Holidays Full List 2025

India Share Market Trading Holidays Full List 2025 National Stock Exchange of India Limited   Circular Department: CAPITAL MARKE...