...return to present and future investors. This 10 per cent is a cost to the firm - formally referred to as the opportunity cost of capital. The opportunity cost of capital is the amount of income, or yield, forgone by giving up an investment in another firm. Capital will not stay...

...frontloads corporate savings, but doesn't increase their savings in the long run. 2. Little reduction in the opportunity cost of capital. The opportunity cost of capital is the amount that a business would need to earn in order to break even from an investment. Under the Flat...

...less efficient units). Apart from the shadow prices of physical assets, the other important aspect is the opportunity cost of capital. The opportunity cost of capital is the benefit foregone by sacrificing (ie, not choosing) the best alternative project. It is however difficult...