Hello, please 200 words at least, thank you: Q: What is meant by the "cost of...

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Hello, please 200 words at least, thank you:
Q: What is meant by the "cost of capital", as the term pertainsto common shareholders' equity? We can easily determine the cost ofdebt, which is the stated rate multiplied by one minus the marginaltax rate; and the cost of preferred stock is usually based upon theannual dividend plus the flotation cost per share for a new issue;but why do we also calculate a "cost" for issuing common stock,other than the flotation? As you may know, a company does not haveto pay dividends, and some elect not to, period. With no obligationto "repay" the common shareholders, why do we still consider thatthere is a cost?

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Cost of Capital is the discount rate used in taking capital budgeting decisions It is calculated by taking weighted average of cost of debt cost of preferred shares and cost of equity All sources of capital including common stock preferred stock bonds and any other longterm See Answer

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Hello, please 200 words at least, thank you:Q: What is meant by the "cost of capital", as the term pertainsto common shareholders' equity? We can easily determine the cost ofdebt, which is the stated rate multiplied by one minus the marginaltax rate; and the cost of preferred stock is usually based upon theannual dividend plus the flotation cost per share for a new issue;but why do we also calculate a "cost" for issuing common stock,other than the flotation? As you may know, a company does not haveto pay dividends, and some elect not to, period. With no obligationto "repay" the common shareholders, why do we still consider thatthere is a cost?