Question：Which of the following is not a feature of the cost of capital of a company?
A. It can be used in investment appraisal.
B. It is the minimum return that a company should make on its own investments.
C. It can be estimated from the average market returns.
D. It is the return that investors expect to be paid for putting funds into the company.
The correct answer is:It can be estimated from the average market returns.
The cost of capital is estimated from the returns required by investors, as reflected in the relationship between the level of dividends and the market price of the shares. Although it may be affected by average market returns, this is not a key determining factor.