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- Title
The Cost of Capital.
- Authors
Vatter, William J.
- Abstract
The article discusses ways for firms to measure the cost of capital. Economic theory views capital as a broad class of productive factors. This includes nearly every accounting asset including land, building, machine or equipment, inventories, receivables, and cash. Economic capital also includes intangible assets including patents, franchises, good will, and organizational structure. The cost of capital remains an imperfect tool for decision making. Experts say the imperfections may be offset by managerial caution in calculation, tempering measurement with judgment, and accepting the responsibility for the risks that must be taken.
- Subjects
CAPITAL costs; CAPITAL -- Accounting; ASSET management; INTELLECTUAL property; ECONOMIC aspects of decision making; FINANCIAL risk management; CAPITAL investments; RESOURCE management; CORPORATE finance management; INVESTMENT analysis; CAPITAL structure; ECONOMICS
- Publication
California Management Review, 1964, Vol 6, Issue 4, p19
- ISSN
0008-1256
- Publication type
Article
- DOI
10.2307/41165603