Cost of Capital VS Internal Rate of Return
The cost of capital can be defined as a firm’s required rate of return, the hurdle rate for new investments, the discount rate for evaluating a new investment, and the firm’s opportunity cost of
funds. It is a rate that must be earned on an investment project if the project is to increase the value of
the common stockholder’s investment. While internal rate of return (IRR), as described above, is simply
the rate of return on an investment that commonly used to evaluate the desirability of investments or projects.