Financial Management : 5mins

Debt is generally the least expensive source of capital. This is primarily due to the following EXCEPT Select one: 0 A. the tax deductibility feature of interest payments 0 B. the legal recourse that creditors have 0 C. the high position in the priority of claims on assets in the event of bankruptcy O D. the fixed interest payments Which of the following statements is TRUE? Select one: 0 A. A rm's cost of capital is the rate of return earned on the most protable investment opportunity available. 0 B. An investment with reasonably higher risk will require a relatively higher cost of capital than an investment of lower risk. 0 C. The cost of new common stock issue is generally less than the cost of retained earnings. 0 D. In determining the cost of financing, management must ignore the needs of the creditors and owners of the rm