In using the cost of capital, it is important that it reflects the historical cost of raising funds over the long run.

Question

Quizplus · Accepted Answer

The cost of capital should reflect the current or expected cost of raising funds, which may not necessarily be the same as the historical cost. The historical cost may be used as a reference point, but it is not always the most accurate reflection of the current cost of capital.

In Using the Cost of Capital, It Is Important That