New study reveals contradictions in cost of capital approaches!
The article explores different ways to calculate the cost of capital in business and finance. It looks at how to determine the required rate of return based on a company's capital structure and uses this information to measure the firm's cost of capital. The researchers analyze various indicators of profitability, like return on investment and return on equity, to see if there are any contradictions between them. The study also investigates the economic implications of these comparisons and presents the findings using a visual framework.