Respuesta :

The average rate of interest a firm pays on its combination of debt and equity is known as

  • cost of capital

What is Capital?

This is one of the factors of production which is used to he;p finance a business by giving it the much needed boost to grow and expand.

With this in mind, we can see that the average rate of interest which a firm pays on its combination of debt and equity is known as the cost of capital as it used to offset net deficits.

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