The Cost of Capital

Knowledge about the magnitude of the cost of capital invested in an asset and its determinants is essential for analysis of corporate investment decisions and profitability. This book provides a clear conceptual understanding of the cost of capital and a critical, comprehensive, and up-to-date evaluation of the practical means available to estimate its magnitude. In-depth discussions of the theoretical and empirical basis for the frequently-used DCF and CAPM methods, and practical advice for their implementation are included. The book is intended primarily for professional managers, but will also be useful for future managers in advanced capital budgeting courses.