The cost of capital is the same as the cost of equity for firms that are financed

Question

Quizplus · Accepted Answer

The cost of capital refers to the overall amount of money that firms pay to finance their operations, including both debt and equity. The cost of equity, on the other hand, refers specifically to the return that investors require to provide capital to the firm. If a firm is financed entirely by equity (i.e. it has no debt), then the cost of capital will be the same as the cost of equity.

The Cost of Capital Is the Same as the Cost