Firms' Cost of Capital Dictates Shareholder Wealth, Impacts Public Prosperity
The cost of capital is crucial for companies in Malaysia to maintain or increase their stock value. If a company can't meet this cost, its stock value will drop. To manage finances well, companies need to accurately calculate their weighted average cost of capital. A study of 30 public listed companies in Malaysia from 2006 to 2015 found that the cost of capital has a significant impact on company performance, as measured by Return on Assets.