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35) Which of the following statements are true: (a) the cost of equity is lower than the cost of debt (b) companies with more volatile
35) Which of the following statements are true: (a) the cost of equity is lower than the cost of debt (b) companies with more volatile cash flows are suitable candidates for higher debt (c) higher proportions of debt in the capital structure will potentially increase the return on equity for a project (d) lenders are more comfortable when the bankruptcy costs for a borrower are relatively lower a,b,c a,c O cd O b,c,d Single choice 36) How do changes in the borrower's capital investment cycle affect the operating cycle and net operating cash flows? Growing capital investment activity is unlikely to affect the outlook for net operating cash flows Growing capital investment activity may lead to an improved outlook for net operating cash flows Maintenance capital investment activity will always result in an improved outlook for net operating cash flows O None of these are applicable
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