How to Measure cost of capital? explain the measures of
cost of capital
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Answer Posted / amit gupta
The cost of Capital to a company is the minimum rate of
return that it must earn on its investments in order to
satisfy the various categories of investors who have made
investments in the form of shares, debentures or term loans.
Difference Sources of Finance :
1. Cost of Debenture
2.Cost of Term Loan
3.Cost of Prefence Share
4.Cost of Equity Share
Ke = D1/Pe + g
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