The cost of capital: Multiple Choice for risky investments is normally higher than the firm's borrowing rate. is the expected rate of return on a capital investment. is the interest rate that the firm pays on a loan from a bank or insurance company.

for risky investments is normally higher than the firm's borrowing rate.

Explanation:

The cost of capital refers to the return i.e expected by the investors. It is the required return for making the capital budgeting project. It comprises of debt and equity. It analysis the business opportunities

Therefore in the given case the cost of capital is normally higher as compared to the firm borrowing rate in the case of riskier investment

Hence, the first option is correct

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