The rate of return a company must earn in order to meet the demands of its lenders and the expectations of its equity holders is known as what?
A)cost of capital
B)preferred stock
C)retained earnings.
D)debenture

Question

Quizplus · Accepted Answer

The rate of return that a company must earn in order to satisfy both its debt holders and equity holders is known as the cost of capital. This is the minimum rate of return that the company must earn in order to justify the resources that have been invested in the business. Preferred stock is a type of equity security that has a fixed dividend and priority over common stock dividend payments. Retained earnings are profits that have been reinvested back into the company. A debenture is a type of debt security that is not secured by any specific asset or collateral.

The Rate of Return a Company Must Earn in Order