The rate of return a company must earn to meet the demands of its lenders and expectations of its equity holders is called
A) opportunity rate.
B) retained earning.
C) cost of capital.
D) acquisition cost.

Question

Quizplus · Accepted Answer

The rate of return a company must earn to meet the demands of its lenders and expectations of its equity holders is called the cost of capital. It represents the cost of funds used to finance a company's operations and is a crucial factor in deciding whether to undertake new projects or investments. Retained earnings refer to the portion of a company's profits that are kept by the company instead of being distributed as dividends to shareholders. Opportunity rate and acquisition cost are not relevant terms in this context.

The Rate of Return a Company Must Earn to Meet