Rate of return which is asked by investors is classified as
A
average cost of capital
B
mean cost of capital
C
weighted cost of capital
D
weighted average cost of capital
Correct Answer: weighted average cost of capital
Rate of return which is asked by investors is classified as weighted average cost of capital. The weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.