2006-07-28 11:04:23 · 5 answers · asked by shaunatorbitt1 1 in Business & Finance ➔ Investing
The cost of capital is actually considered by corporations as WACC - Weighted Average Cost of Capital. It takes into consideration, captial raised via 3 major channels:
1 - By taking on debt
2 - By issuing preferred stock
3 - By issuing common stock
Usually this is simplified to debt and common stock. The percentage of each of these components in a companies capital structure dictates the weights. The cost of common stock can be more if new stock is being issued (since issuance costs will increase it).
2006-07-28 11:13:45 · answer #1 · answered by juliuzseizure 2 · 0⤊ 0⤋
The cost of capital is what is costs to borrow money. For example, if you issue debt, the cost of capital is the interest rate you pay plus any other expenses such as fees.
2006-07-28 11:07:08 · answer #2 · answered by Amy 2 · 0⤊ 0⤋
Cost of capital is the rate of return that fairly compensates the investor for the level of risk the investor is taking.
2006-07-28 13:42:30 · answer #3 · answered by NC 7 · 0⤊ 0⤋
what is the cost of money? Maybe you're asking what the interest rate on loans is these days. I have no idea.
2006-07-28 11:07:04 · answer #4 · answered by sophieb 7 · 0⤊ 0⤋
Interest and any other fees that may apply
2006-07-28 15:47:42 · answer #5 · answered by Pulaski8229 2 · 0⤊ 0⤋