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Question

Cost of capital from all the sources of funds is called ________.


A
specific cost
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B
composite cost
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C
implicit cost
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D
simple average cost
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Solution

The correct option is B composite cost
Composite cost of capital is a company's cost to finance its business, determined by, and also referred to as "weighted average cost of capital" or $$WACC.$$ The calculation involves multiplying the cost of each capital component by its proportional weight and taking the sum of the results.

Business Studies

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