Journal of Finance and Marketing

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Journal of Finance and Marketing 44 7897 074717

Cost Of Equity New Open Access Journals

The cost of capital is the total cost of raising capital, taking into account both the cost of equity and the cost of obligation. A constant well-performing company will generally have a lower cost of capital. To calculate the cost of capital the cost of equity and cost of liability must be weighted and then added together. The cost of capital is generally calculated by using the weighted average cost of capital. Investment in the equity of other businesses can be accounted for on the basis of the nature of such investments. The investment could be for trading in short term for available for sale, for holding till maturity, investments could be for significantly influencing the business activity of other businesses. The accounting treatment depends on the purpose of investment and accordingly either Cost method.

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