A corporation's cost of capital is its weighted average after-tax cost of its debt, preferred stock,
common stock, retained earnings, and other components of stockholders' equity. The cost of
capital is usually the minimum return that a company should accept on its investments.
Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. He is the sole author of all the materials on AccountingCoach.com. Read more about the author.