The Cost of Capital Is the Simple Average Rate of Return

question 87

True/False

The cost of capital is the simple average rate of return that a company must pay to its long-term creditors and the shareholders.

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Definitions:

Entry

A record in an account that documents a financial transaction in bookkeeping.

Special Journals

Customized accounting journals used for recording specific types of transactions that occur frequently.

General Journal

A primary accounting record where all types of financial transactions are initially recorded in chronological order before being posted to specific accounts in the general ledger.

Cash Receipts Journal

A specific financial journal used in accounting to record all cash inflows to a business.