Question

An excellent example of the combined cost of capital is ____________.

• A. Cost of equity capital
• B. Cost of debt capital
• C. Overall cost of capital
• D. Weighted cost of capital

Answer 1

The correct option is D Weighted cost of capital

Weighted average cost of capital is the average rate of return a company expects to compensate all its different investors. The weights are the fraction of each financing source in the company's target capital structure.Weighted average cost of capital. The weighted average cost of capital is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital.h financing source in the company's target capital structure.