Glossary
With over 200 terms in both English and French, our M&A Dictionary is designed to help you better understand the key words and concepts related to the sale oe purchase of a business in Canada.
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Cost of Capital
« Back to Glossary IndexCategory: Accounting and Finance
The term cost of capital is a fundamental financial metric used by companies to determine the minimum acceptable rate of return required to justify a particular investment. In other words, businesses use the cost of capital to quantify the financial return that an investment must surpass to make it financially viable for the company. By analyzing the cost of capital for a project or investment, companies can ensure that the project will generate returns at or above a specified minimum, thus justifying the allocation of resources and money toward it.
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