A growth company can invest in projects that generate a return greater than the firm's
A) Return on equity.
B) Cost of debt.
C) Cost of equity.
D) Cost of capital.
E) Return on assets.

Question

Quizplus · Accepted Answer

The cost of capital is the minimum return that a company must earn on its investments in order to satisfy all its investors. By investing in projects that generate a return greater than the firm's cost of capital, a growth company can create value for its investors and continue to grow over time.

A Growth Company Can Invest in Projects That Generate a Return