The rate of return that management expects to pay on all borrowed and equity funds is the
A) cost of capital.
B) cutoff rate.
C) hurdle rate.
D) minimum rate.

Question

Quizplus · Accepted Answer

The cost of capital is the rate of return that a company must earn on its investment projects to maintain its market value and to attract funds. It represents the company's cost of financing and is used as a benchmark for evaluating the profitability of investment opportunities.

The Rate of Return That Management Expects to Pay on All