Why Does a Company Use Its Cost of Capital as the Minimum

question 59

Essay

Why does a company use its cost of capital as the minimum required rate of return for its capital investment decisions?

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Definitions:

Muscular

Relating to or affecting the muscles of the body.

Sternocleidomastoid

A major muscle in the neck that runs from the sternum and clavicle to the mastoid process of the temporal bone and is involved in head rotation and flexion.

Trapezius

The large muscle of the back and neck.

Pectoralis Major

A thick, fan-shaped muscle situated at the chest of the human body which aids in the movement of the shoulder joint.