Opportunity Cost Of Capital Formula. Opportunity cost return of most lucrative option return of chosen option. It can be a project foreign investment or a particular option taken by a group of people or an individual for personal purpose or for a business purpose.
Fo return on best foregone option begin aligned text opportunity cost text fo text co textbf where. Opportunity cost 2 the opportunity cost of choosing the software company stock as an investment carrier is 2. Opportunity cost return of next best alternative not chosen return of the option chosen.
Fo return on best foregone option begin aligned text opportunity cost text fo text co textbf where.
This concept is not as simple as it may first appear. Cost of capital cost of debt cost of preferred stock cost of common stocks cost of capital interest expense 1 tax rate d 0 p 0 r f β r m r f or. Opportunity cost formula opportunity cost can be termed as the next best alternative of a particular option which has been executed or about to execute. It can be a project foreign investment or a particular option taken by a group of people or an individual for personal purpose or for a business purpose.
