The cost of capital is the rate of return a firm must earn on investments in order to increase the firm's value.

Name: The cost of capital is the rate of return a firm must earn on investments in order to increase the firm's value.
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The cost of capital is the minimum rate of return that a company must generate in order to be able to satisfy its investors and maintain its market position. By earning this rate of return, a company can reinvest its earnings in new projects and continue to grow.

The Cost of Capital Is the Rate of Return a Firm