Cost of capital is the same as cost of equity for firms:

Question

Quizplus · Accepted Answer

Cost of capital refers to the cost the company faces to finance its assets or projects. Cost of equity is one of the components of the cost of capital and represents the returns expected by the shareholders who have invested their money in the company. Therefore, the cost of capital for a company financed entirely by equity is the same as the cost of equity. For a company financed entirely by debt, the cost of capital would be the cost of debt. For a company financed by both debt and equity, the cost of capital would be a combination of the cost of debt and the cost of equity.

Cost of Capital Is the Same as Cost of Equity