What is Cost of Capital
Beta risk estimate. Weighted Average Cost Of Capital - WACC. Pin On Finance It is the required rate of return that makes a capital project count. . It represents the degree of perceived risk as well as the rate of return that can be earned by putting money into an investment. Weighted average cost of capital WACC is a calculation of a firms cost of capital in which each category of capital is proportionately weighted. Cost of capital is an important factor that influences a firms capital structure. Cost of capital is the cost or fund required to build a project like building a factory malls etc. The weighted average cost of capital WACC is the average after tax cost of all the sources. In our example above Company A will do a careful analysis of their cost of capital before undertaking a plant renovation or building a new factory. Cost of capital refers to the entire cost or expenses required to finance a ...