A firm's cost of capital may also be known as:

Question

Quizplus · Accepted Answer

The cost of capital refers to the cost a firm incurs to finance its operations, which includes the cost of equity and debt financing. Therefore, it can also be referred to as the cost of financing. The internal rate of return (B) is a method used to calculate the profitability of an investment, while the modified internal rate of return (C) adjusts for cash flows that are reinvested at different rates. The prime rate (D) is the interest rate that banks charge their most creditworthy customers, and is often used as a benchmark for lending rates.

A Firm's Cost of Capital May Also Be Known As