Risk-adjusted cost of capital
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Risk-adjusted cost of capital is the cost of capital appropriate for a given project, given the riskiness of that project. The greater the risk, the higher the cost of capital.
Definitions
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Risk-adjusted cost of capital. The cost of capital appropriate for a given project, given the riskiness of that project. The greater the risk, the higher the cost of capital.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
