The most acceptable method of computing overall cost of capital is ______________________.

The marginal method

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The equity method

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The weighted average method

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All the above

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Solution

The correct option is C The weighted average method
The cost of capital refers to the cost incurred by a company in rasing a certain amount of money that is capital for the business. The best method to compute the cost of capital is weighted average method where weights are allotted to different costs in order to calculate the average cost.

Suggest Corrections

List-I	List-II
(a) Realised yield method	(i) Cost of equity share capital
(b) Taxation	(ii) Cost of equity capital
(c) Cost of total capital employed	(iii) Cost of debt capital
(d) Dividend growth is a consideration	(iv) Weighted cost of capital