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Why does it make sense to use the Weighted Average Cost ofCapital as the...

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Accounting

Why does it make sense to use the Weighted Average Cost ofCapital as the minimum required rate of return to analyze acompany’s investment opportunities?

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Weighted Average cost of capital is the average of the cost which organisation bears for using the fund which are having different sources Types of the source of fund can be divided in two class Owners Fund Debt Fund Owners Fund includes capital reserves profit and loss account credit balance securities premium account balance etc Debt Fund includes Debemtures Bonds Term Loans Long term Notes Payable etc    See Answer
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In: AccountingWhy does it make sense to use the Weighted Average Cost ofCapital as the minimum...Why does it make sense to use the Weighted Average Cost ofCapital as the minimum required rate of return to analyze acompany’s investment opportunities?

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