judgment None of the above is a correct statement. 2. The is the return that must be earned on invested funds to cover the cost of financing such investments h cost of eapital c required rate of return opportunity cost rate All of the above. m's stockholders are not well diversified, the firm's true investment risk will not be measured by beta and the CAPM procedure will the correct value of r.. overstate accurately predict C understate none of the above. 4. The before-tax cost of debt, which is lower than the afier-tax cost, is used as the component cost of debt for purposes of developing the firm's WACc. True alse 5. Funds acquired by the firm through retaining earnings have no cost because there are no dividend or interest payments associated with them, but capital raised by selling new stock or bonds does have a cost. True False