Tema 6 Curs - Botezatu Ninel

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In order to make long-term investments in new product lines, new equipment and other assets, managers must know the cost of obtaining funds to acquire these assets. The cost associated with different sources of funds is called the cost of capital. Cost of capital The cost of capital may be:  an explicit cost (for ex., the interest paid on debt) or  an implicit cost (for ex., the expected price appreciation of shares of the firm’s common