Estee Lauder Companies' stock was sold by a variety of institutional investors in the last quarter, including Fred Alger Management Inc., American Century Companies Inc., Brown Advisory Inc., Renaissance Technologies LLC, Credit Agricole S A, Robeco Institutional Asset Management B.V., TIAA CREF Investment Management LLC and Montag & Caldwell LLC.
DEFINITION of 'Cost Of Capital'. The cost of funds used for financing a business. Cost of capital depends on the mode of financing used â it refers to the cost of equity if the business is financed solely through equity, or to the cost of debt if it is financed solely through debt.ince the cost of capital represents a hurdle rate that a company must overcome before it can generate value, it is extensively used in the capital budgeting process to determine whether the company should proceed with a project.
Cost of capital plays important roles in financial analysis and asset valuation. A chief use of the marginal cost of capital estimate is in capital-budgeting decision making.What role does the marginal cost of capital play in a company's investment program, and how do we adapt it when we need to evaluate a specific investment project?n other words, the optimal capital budget occurs when the marginal cost of capital intersects with the investment opportunity schedule. The relation between the MCC and the Investment opportunity schedule (IOS) provides a broad picture of the basic decision-making problem of a company.