Hi all, I am new to finance and would like to learn more. I understand that the cost of capital of a company comes from (1) cost of debt and (2) cost of equity.
The cost of debt is the interest that a company need to pay for a loan from bank. How about cost of equity? Is it the rate of return that a company must deliver in order to satisfy the shareholders so that they will keep their share and maintain the share price ? e.g in terms of dividend paid out, increase in earning per share (so share price will rise) ...?
And why is the cost of equity is higher than cost of debt?
Submitted November 30, 2018 at 04:02AM by pinton96 https://ift.tt/2AEiizo
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