Cost of capital influences investments from "summary" of Loose Leaf Finance with Connect Access Card by Troy Adair,Marcia Millon Cornett,John Nofsinger
The cost of capital is a critical factor that affects the decisions made by companies when it comes to investing in projects. This concept refers to the cost of obtaining funds to finance a particular project or investment. It includes both the cost of debt and the cost of equity, as well as any other sources of financing that a company may use. When evaluating potential investments, companies need to consider the cost of capital in order to determine whether the potential returns from the investment exceed the cost of financing it. If the cost of capital is too high, it may not make financial sense for the company to proceed with the investment. On the other hand, if the returns from the investment are expected to be great...
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