What does cost of capital mean and how is it used in financial management? Learn how to calculate the cost of capital – and avoid costly mistakes. How to Evaluate Return of Capital When an investor funds an investment, that original purchase amount is considered the cost basis of the investment (also known as principal). When that principal is returned to the investor, this is a nontaxable event, but simply a return of the original funds used to buy the investment. Return of capital should be considered whenever an investor receives a payment from an investment. While return of capital gives you quicker access to cash without the ... What is the cost of equity? Learn the meaning, get examples, and see the formula with this expert-reviewed definition. What is the meaning of IRR? Our financial experts use internal rate of return examples to teach you how to calculate IRR with ease.
