The cost of capital and interest expense are the same thing.

Question

Quizplus · Accepted Answer

The cost of capital and interest expense are not the same thing. The cost of capital refers to the total cost involved in financing a company or investment, including both debt and equity. It includes expected returns to investors and the cost of borrowing. Interest expense, on the other hand, is the cost of borrowing money for a specific period of time, usually determined by the interest rate. While interest expense is a component of the cost of capital, it is not the same thing.

The Cost of Capital and Interest Expense Are the Same