Abstract
As seen in 7 Chap. 5, the existence of any business starts with capital. However, capital is not available free of charge. Typically, the main sources of capital are equity and debt—hence, capital providers (equity holders and debtholders) are investors who expect returns from a company. That is, a company ought to compensate its capital providers for sacrificing their funds—this compensation is the cost of capital. Therefore, “capital is not a cost, but it has a cost.”
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Kulwizira Lukanima, B. (2023). An Overview of Capital Structure and Cost of Capital. In: Corporate Valuation. Classroom Companion: Business. Springer, Cham. https://doi.org/10.1007/978-3-031-28267-6_11
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DOI: https://doi.org/10.1007/978-3-031-28267-6_11
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