The cost of capital is a dynamic concept; it is affected by economic and firm-specific factors such as business risk and financial risk.

Question

Quizplus · Accepted Answer

The cost of capital is influenced by various factors that can change over time such as economic conditions, business risk, financial risk, inflation, interest rates, and market conditions. Therefore, it is considered a dynamic concept that is subject to both internal and external factors.

The Cost of Capital Is a Dynamic Concept; It Is