Answer
A Company's cost of capital is the average rate of return required by investors in the company's securities. This average rate is used as a minimum acceptable rate of return for new investment being considered by the firm.
Cost of capital = debt proportion X debt rate + Stock proportion x debt rate
These cost and proportions are called component cost of capital
Weighted average cost of capital is a financial metric used to measure the cost of capital to a firm. It is most usually used to provide a discount rate for a financed project because the cost of financing the capital is a fairly logical price tag to put on the investment WACC is used to determining the discount rate used in a DCF valuation model
The overall percentage cost of the funds used to finance a firm's assets. Cost of capital is a composite cost of the individual sources of funds including common stock debt preferred stock and retained earnings. The overall cost of capital depends on the cost of each source and the proportion the source represents of all capital used by the firm. The goal of an individual or business is to limit investment to assets that provide a return that is higher than the cost of the capital that was used to finance those assets.