Asked by Cameron Lopez on Apr 24, 2024

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The cost of capital is the average rate of return a company must pay on its short-term bank borrowings.

Cost of Capital

The yield a corporation needs to generate from its investment ventures to sustain its market price and appeal to investors.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage.

Short-term Borrowings

Loans or financial obligations that are due for repayment within a short period, typically less than a year.

  • Delve into the essential fundamentals of capital budgeting and the different practices applied for investigating investment projects.
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KS
kiana smith5 days ago
Final Answer :
False
Explanation :
The statement about the cost of capital is incorrect. The cost of capital is the average rate of return a company must pay on its long-term debt and equity financing. It is not related to short-term bank borrowings.