Is it possible for investors ever to require a lower rate of return on a companys equity

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Is it possible for investors ever to require a lower rate of return on a company’s equity than on its debt, assuming that the debt is in a junk-bond category of quality?

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Contemporary Financial Management

ISBN: 9780324289114

10th Edition

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

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Question Posted: Jul 17, 2012 02:20 AM

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Is it possible for investors ever to require a lower rate of return on a companys equity

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No The cost of equity capital for a firm must always be greater than the cost of debt capi...View the full answer

Contemporary Financial Management

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