In business and finance, the cost of capital is the cost of obtaining funds for, or, conversely, the required return necessary to meet its cost of financing a capital budgeting project. Said another way, it is “the minimum return that a company should make on its own investments, to earn the cash flow out of which investors can be paid their return.
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Financial tag cloud
acquisition price capital asset pricing model capital asset pricing model capm CAPM cash flow cash flow analysis cash flow statement Comparable company analysis continuing value cost of capital current assets current market value dcf model DCF Valuation Deal Value debt facility discounted cash flow discounted cash flow analysis Discount Rate EBITDA % estimate value EV/EBITA facebook FCFE FCFF financial definitions Financing Structure Free Cash Flow future performance IRR key ratios LBO model M&A transactions model template model tutorial net working capital PPE Precedent transaction analysis private equity companies return on equity revolving credit facility Small cap premium The Hybrid Method trading comps WACC