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Commerce · Q190

Financial Management

Graduate and Post Graduate · Commerce · question 190

Q190

Cost of capital is the ______ rate of return expected by the investor.

A.
minimum
B.
maximum
C.
expected
Answer
D.
marginal

Answer: Option C

Solution

Answer: Option C
Solution:
Cost of capital is the expected rate of return expected by the investor. Cost of capital refers to the opportunity cost of making a specific investment. It is the rate of return that could have been earned by putting the same money into a different investment with equal risk.