The minimum acceptable expected rate of return on a project of a specific risk is the:
A) project cost of capital.
B) company cost of capital.
C) risk-free rate of return.
D) project beta times market risk premium.

Question

Quizplus · Accepted Answer

The minimum acceptable expected rate of return on a project of a specific risk is the project cost of capital. The project cost of capital reflects the required rate of return based on the specific risk associated with the project, and represents the minimum return that investors require to compensate them for the risk of investing in the project.

The Minimum Acceptable Expected Rate of Return on a Project