Question

What do we mean when we say that a corporation’s cost of equity capital is 16 percent?

Answer 1

A company with a cost of equity capital of 16%, means that their investors require a return of 16%.

What does the cost of equity mean?

Companies have investors in the form of shareholder and these shareholders require a certain amount of profit on their investment in the company.

The profit or return that they require, is the cost of equity. When this is 16%, it means that investors require 16% returns on their investment.

Find out more on cost of equity at https://brainly.com/question/14041475.

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