When a company is starting up, it likely needs to borrow startup funds. a key advantage of borrowing from global capital markets is that it lower's the borrowers cost of capital.
The cost of capital is the minimum return a business must achieve to be able to justify investing in a capital budgeting project, like constructing a new factory.
Analysts and investors refer to cost of capital, but it is always an assessment of whether the costs associated with a planned choice can be justified. A comparison of an investment's prospective return to its cost and hazards is another way that investors may use the phrase.
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