1) Which of the following are basic sources (forms) of capital?

Equity and Leases

Leases and Convertible Bonds

Debt and Leases

Debt and Equity

Convertible bonds and Debt

2) Which of the following statements regarding the cost of equity is correct?

The cost of equity for a not-for-profit business is zero.

The debt cost plus risk premium method is one way to estimate the cost of equity.

The cost of debt is the interest rate set on debt financing, while the cost of equity is defined similarly; it is the rate of return required by equity investors.

None of the statements are correct.

3. The corporate cost of capital is a blend (weighted average) of the costs of all of a business's financing sources.

True

False