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Which of the following statements is true about capital requirements? Regulators prefer higher capital requirements because it provides an additional cushion to absorb losses. O Bankers prefer higher capital because it is the least expensive source of financing. Higher capital requirements increase credit risk. Risk-based capital requirements allow banks ignore off-balance sheet commitments. Assume a bank has an ROA of 1.25%, plans to maintain a dividend ratio of 30%, plans to grow assets by 18%, and the equity to total asset target ratio is 8%. How much external capital (as a % of total assets) must the bank issue? O 0.3925% 0.4350% 0.5650% 0.6285% Why can banks with greater equity financing borrow funds cheaper than other banks? Because they have proportionately more financial leverage and hence less risk. Because a greater proportion of their assets have to be in default before they fail. Because they have less credit risk. Because they have lower required reserves