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What Is A ‘composite Cost Of Capital’? |
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Answer» Also known as the weighted average cost of capital (WACC), a composite cost of capital is a company’s cost to BORROW money given the PROPORTIONAL amounts of each type of debt and EQUITY a company has taken on. WACC= Wd (cost of debt) + Ws (cost of stock/RE) + WP (cost of PF. Stock) Also known as the weighted average cost of capital (WACC), a composite cost of capital is a company’s cost to borrow money given the proportional amounts of each type of debt and equity a company has taken on. WACC= Wd (cost of debt) + Ws (cost of stock/RE) + Wp (cost of pf. Stock) |
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