The cost of capital is
A)the minimum rate of return an investment project must generate in order to pay its financing costs.
B)the minimum rate of return an investment project must generate in order to pay its financing costs plus a reasonable profit.
C)the maximum rate of return an investment project must generate in order to pay its financing costs.
D)the maximum rate of return an investment project must generate in order to pay its financing costs plus a reasonable profit.

Question

Quizplus · Accepted Answer

The cost of capital represents the minimum return that an investment project must earn to cover the cost of financing, without necessarily including a profit margin.

The Cost of Capital Is