Why would a firm calculate their Cost of Capital?

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Clarification of Question by pearce1-ga on 30 Nov 2005 09:38 PST

I know this is quite a basic question, but I would really like a
little depth to the answer. Thanks, Ben.

Pearce1 --

Wikipedia does a brief overview but covers many main points:
http://en.wikipedia.org/wiki/Cost_of_capital

Since Google Answers researchers get asked about many aspects of "cost
of capital", a quick search of this site from the Google Answers home
page will give you many views of the issues in finance -- from optimal
strategies to why established companies fund their leasing divisions
via debt.

Best regards,

Omnivorous-GA