Q22
The company's cost of capital is called ________.
A.
Leverage
B.
Hurdle rate
AnswerC.
Risk rate
D.
Return rate
Answer: Option B
Solution
Answer: Option B
Solution:
A company's cost of capital is simply the cost of money the company uses for financing. If a company only uses current liabilities and long-term debt to finance its operations, then it uses debt and the cost of capital is usually the interest rate on that debt.The cost of capital is also called the hurdle rate.