What is Cost of Capital
Cost of capital is the minimum required rate of return required by the investors form their investment of funds.
Scholars' View about Cost of Capital
1"Cost of capital is the required rate of return on the various types of financing"
…………………..J.C Van Horne
2.Cost of capital is the rate of return that a firm must earn on the projects in which it invests to maintain its market value and attract funds”
……………………L.J Gutman
3"A company's cost of capital is the average return of required by investors in the company's securities"
…………………….Schall and Haley
Definition of Cost of Capital
Inclusion it can be said that cost of capital is the minimum return that must be earned from investment. This rate is also called hurdle rate, target rate, cutoff rate, and minimum rate of return.
