The cost of capital is the expected rate of return needed to attract investment funds, crucial in finance. There are three main ways to value assets: income, market, and cost-based approaches. Cost of capital estimates are essential for income-based valuation methods. In developed countries, estimating cost of capital is easier due to abundant data, while in emerging economies, it's more challenging due to data scarcity and higher risks. Understanding cost of capital is key for global investment decisions.