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Author Question: Which statement regarding cost of capital is true? (Read 54 times)

903f23fj0

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on: Aug 7, 2023
Which statement regarding cost of capital is true?

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Lower flotation costs tend to increase the cost of equity capital.


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The tax-adjusted cost of debt is always greater than the interest rate on debt, provided the company does in fact pay taxes.


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Because no flotation costs are required to obtain capital as retained earnings, the cost of retained earnings is generally lower than the after-tax cost of debt.


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If a company assigns the same cost of capital to all of its projects regardless of each project’s risk, then the company is likely to reject some safe projects that it should accept and to accept some risky projects that it should reject.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by 903f23fj0 on Aug 7, 2023

viper01

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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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903f23fj0

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

blakcmamba

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Reply 3 on: Yesterday
Excellent

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