Cost of Capital
Estimating the cost of capital is critical when assessing the long-run expected return on investments. From valuing individual securities or capital projects to evaluating mergers or acquisitions, estimating the cost of capital is one of the most important decisions that corporate finance professionals make. The limitations of the methods commonly used to estimate the cost of capital have been magnified in the wake of the economic turbulence of the last Financial Crisis. New challenges have arisen in estimating the cost of capital that all corporate finance professionals need to be aware of. The information on this page is intended to provide more detail and discussion about these new challenges, and to provide the most up-to-date thought leadership in estimating the cost of capital. Bookmark this page and check back for periodic updates.
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