Generally speaking a firm's cost of ________ capital is greater than the firm's ________.

Question

Quizplus · Accepted Answer

The cost of equity capital is typically higher than the weighted average cost of capital (WACC) for a firm. This is because the cost of equity capital is based on the expected return demanded by investors for the level of risk associated with the firm's stock, while WACC takes into account both the cost of equity and the cost of debt, which is usually lower than equity.

Generally Speaking a Firm's Cost of ________ Capital Is Greater