composite cost of capital definition

composite cost of capital

Weighted average of the component costs of common stock (ordinary shares), preferred stock (preference shares), and debt. Each component of capital is given a relative importance (weight) on the basis of its associated interest rate, management's loss of control, risk exposure, etc., to compute weighted average cost of capital. It shows the cost of each additional dollar of capital, as opposed to the average cost of the total capital raised.

composite cost of capital is in the Accounting & Auditing, Banking, Commerce & Finance, Investing and Securities & Futures Trading subjects.

composite cost of capital appears in the definitions of the following terms: weighted average cost of capital and cost of capital

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