Asked by Cameron Lopez on Apr 24, 2024
Verified
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.
Verified Answer
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.
Learning Objectives
- Delve into the essential fundamentals of capital budgeting and the different practices applied for investigating investment projects.