A firm's cost of capital:

A) is the rate at which it borrows from its bank.
B) is the average rate it pays investors for the use of their money (capital) .
C) is the cost the facility housing its executive offices.
D) is the rate earned by its stockholders.

Cost of Capital

A financial metric representing the minimum return that a company must earn on its existing asset base to satisfy its creditors, owners, and other providers of capital.

Average Rate

The mean value calculated by dividing the sum of all rates by the number of rates.