Abstract
LONG-TERM CAPITAL is the lifeblood of any corporate enterprise, and without adequate sources of capital, a firm would be doomed to financial failure. Yet, adequacy of capital is not a guarantee that a company will be able to discharge its functions successfully. Proper utilization of funds and an optimum balance among capital sources are also prime considerations. It is the determination of proper financial proportionality among these sources, with primary emphasis upon the cost of capital, that is the subject of this paper. Following are the primary considerations used to estimate the cost of corporate funds. Later, each point will be discussed in greater detail.
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