Cost Of Capital
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), or, from an investor's point of view "the shareholder's required return on a portfolio company's existing securities". It is used to evaluate new projects of a company as it is the minimum return that investors expect for providing capital to the company, thus setting a benchmark that a new project has to meet.
Read more about Cost Of Capital: Summary, Cost of Debt, Cost of Equity, Weighted Average Cost of Capital, Capital Structure, Modigliani-Miller Theorem
Famous quotes containing the words cost of, cost and/or capital:
“Mining today is an affair of mathematics, of finance, of the latest in engineering skill. Cautious men behind polished desks in San Francisco figure out in advance the amount of metal to a cubic yard, the number of yards washed a day, the cost of each operation. They have no need of grubstakes.”
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—Paul Goodman (1911–1972)