Is the cost of capital for each source of funds is a cost dependent on current market conditions and expected reates of return?

Yes, the cost of capital for each source of funds is indeed dependent on current market conditions and expected rates of return. Market interest rates, investor risk perceptions, and overall economic conditions can affect the cost of debt, equity, and other financing sources. Additionally, expected returns on investments influence how much investors demand in compensation for their risk, thereby impacting the overall cost of capital for a business.