The cost of capital is ________.
A)the cost of debt in a firm that finances with both debt and equity
B)the cost of each financing component multiplied by that component's percent of the total borrowed
C)another name for the IRR
D)All of the above

Question

Quizplus · Accepted Answer

The cost of capital is the weighted average cost of the components of capital (debt, equity, etc.) that a firm uses to finance its operations, where each component is multiplied by its proportion in the total amount borrowed. Option A refers only to the cost of debt, while option C refers to a specific financial metric.

The Cost of Capital Is ________