what should I reply back to my peer to add to the conversation Explain the calculation and interpretation of the corporate cost of capital. "The corporate cost of capital is the weighted average of the costs of a business's debt and equity financing." (Rieter, Song) The reason you have to calculate and interpret what your corporate cost of capital is because the cost of capital sets the minimum acceptable rate of return for that businesses new investments, for example if a new machine or center has a capital cost of 10% and is expected to return 10 if not more percentage then it is financially attractive and leaves less risk than reward.