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Author Question: Which of the following statements is correct? (Read 3 times)

kms5229

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on: Aug 7, 2023
Which of the following statements is correct?

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The cost of capital used to evaluate a project should be the cost of the specific type of financing used to fund that project, i.e., it is the after-tax cost of debt, if debt is to be used to finance the project, or the cost of equity, if the project will be financed with equity.


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The before-tax cost of debt that should be used as the component cost when calculating the WACC is the average before-tax cost of all of the firm’s outstanding debt.


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The bond-yield-plus-risk-premium approach is the most complex and objective method for estimating a firm’s cost of equity capital, which is highly likely to produce a precise cost of equity.


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The cost of equity is generally harder to measure than the cost of debt because there is no stated, contractual cost number on which to base the cost of equity.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by kms5229 on Aug 7, 2023

bobbbbb

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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kms5229

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

sailorcrescent

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Reply 3 on: Yesterday
Excellent

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