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Cost Of Capital

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Dictionary Says

Definition of 'Cost Of Capital'

The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile. Cost of capital includes the cost of debt and the cost of equity.
Investopedia Says

Investopedia explains 'Cost Of Capital'

The cost of capital determines how a company can raise money (through a stock issue, borrowing, or a mix of the two). This is the rate of return that a firm would receive if it invested in a different vehicle with similar risk.

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