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The weighted cost of capital of a company is: a. The minimum percentage to sell to...

The weighted cost of capital of a company is:
a. The minimum percentage to sell to the company
b. The percentage of minimum cost required by the company to develop a new project.
c. The minimum percentage of the opportunity cost of a company.
d. The minimum cost percentage required by investors to invest in the company.

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Answer #1

Option D is correct. The minimum cost percentage required by investors to invest in the company

WACC consists of the Required Rate of Return by the shareholder and the Debtholders combined, Risk is evaluated by the investors and then as per risk they decide the return they expect from the Investment they are going to make in the company. Therefore, WACC is the minimum percentage required by investors to invest in a company.

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