Cost Of Capital

Cost of capital It is the minimum rate of return that a firm must earn on its investments for the market value of the firm to remain unchanged. It is also referred to as cut-off rate, target rate, hurdle rate, minimum required rate of return or standard return.

Types of cost ,[object Object],[object Object]

Assumptions to measure cost of capital ,[object Object],[object Object]

Specific cost of capital ,[object Object],[object Object],[object Object],[object Object]

Cost of Debt ,[object Object],[object Object],[object Object],[object Object],[object Object]

Cost of redeemable debt ,[object Object],[object Object],[object Object]

Cost of preference of shares ,[object Object],[object Object],[object Object],[object Object],[object Object]

Cost of Equity Capital ,[object Object],[object Object]

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[object Object],[object Object],[object Object]

Overall cost of Capital ,[object Object],Where w is the proportion of specific capital in the capital structure ki is specific cost of capital

Assignment of weights ,[object Object],[object Object]

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Cost Of Capital

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Cost Of Capital