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Question

Firm's Cost of Capital is the average cost of ______________.
  1. All sources
  2. Share capital
  3. All borrowings
  4. Share Bonds & Debentures

A
Share Bonds & Debentures
B
All sources
C
Share capital
D
All borrowings
Solution
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The weighted average cost of capital is the rate that the company is expected to pay on an average to all the lenders against the money invested or funded by them. It included all sources i.e. equity share holders, debts, preference share holders, bonds etc

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