73. A single, overall cost of capital is often used to evaluate projects because:

a) it avoids the problem of computing the required rate of return for each investment proposal.

b) it is the only way to measure a firm's required return. c) it acknowledges that most new investment projects have about the same degree of risk.

d) it acknowledges that most new investment projects offer about the same expected return.

74. The cost of equity capital is all of the following EXCEPT:

a) the minimum rate that a firm should earn on the equity-financed part of an investment.

b) a return on the equity-financed portion of an investment that, at worst, leaves the market price of the stock unchanged.

c) by far the most difficult component cost to estimate.

d) generally lower than the before-tax cost of debt.

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75. In calculating the proportional amount of equity financing employed by a firm, we should use:

a) the common stock equity account on the firm's balance sheet.

b) the sum of common stock and preferred stock on the balance sheet.

c) the book value of the firm.

d) the current market price per share of common stock times the number of shares outstanding.