The__________ is the rate of return required by the market suppliers of capital in order to attract their funds to the firm.
A) gross profit margin
B) internal rate of return
C) cost of capital
D) yield to maturity

Question

Quizplus · Accepted Answer

Cost of capital is the rate of return required by the market suppliers of capital in order to attract their funds to the firm. It is the weighted average of the cost of debt and the cost of equity. Gross profit margin is a measure of profitability, internal rate of return is a measure of the potential profitability of an investment project, and yield to maturity is the rate of return anticipated on a bond if it is held until the maturity date. None of these measures directly relate to the rate of return required by the market suppliers of capital.

The__________ Is the Rate of Return Required by the Market