In economics and accounting, the cost of capital is the cost of a company 's funds (both debt and equity), or, from an investor 's point of view "the required rate of return on a portfolio company 's existing securities ''. It is used to evaluate new projects of a company. It is the minimum return that investors expect for providing capital to the company, thus setting a benchmark that a new project has to meet.
a company’s required rate of return typically its cost of capital is called the
required rate of return on a portfolio company 's existing securities