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The Weighted-Average Cost of Capital Is the Return the Company

question 41

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The weighted-average cost of capital is the return the company needs to earn after tax in order to satisfy all its security holders.


Definitions:

Contract

A legally binding agreement between two or more parties that outlines obligations each party must fulfill.

Warranty Of Assignability

A warranty of assignability assures that a contractual right or interest can be transferred or assigned to another party.

Common Law

A legal system based on custom and court rulings as opposed to written laws passed by a legislature.

Assignor

An individual or entity that transfers rights or interests in a contract to another, known as the assignee.

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