You visited us 0 times! Enjoying our articles? Unlock Full Access!
See Also
How Do Cost of Debt Capital and Cost of Equity Differ?Equity Share Capital: Meaning, Types, Features & BenefitsThe cost of preference capital may be defined as __________________.The dividend expected by equity shareholdersThe dividend expected by both equity and preference shareholdersThe dividend expected by preference shareholdersNone of the aboveGet Rid Of Expensive Debt, Once And For All. - VantageA Bonds B Equity shares D Preference shares
Open in App
Solution
Verified by Toppr
The basic definition of cost of capital is simply the cost, an entity must pay to raise funds. Cost of equity is a return, a firm needs to pay to its equity shareholders to compensate the risk they undertake, by investing the amount in the firm. It is based on the expectation of the investors, hence this is the highest cost of capital.
Was this answer helpful?
2
