Question
When debt-to-value ratio of a company rises from 0% to 100%, the equity cost of capital would A. keep rising. B. keep falling. C. remain
When debt-to-value ratio of a company rises from 0% to 100%, the equity cost of capital would A. keep rising. B. keep falling.
C. remain constant. D. rise first and then remain constant. E. remain constant at first then start to rise.
1.3.b (5 marks) When debt-to-value ratio of a company rises from 0% to 100%, the debt cost of capital would A. keep rising. B. keep falling.
C. remain constant. D. rise first and then remain constant. E. remain constant at first then start to rise.
1.3.c (5 marks) When debt-to-value ratio of a company rises from 0% to 100%, the weighted average cost of capital would A. keep rising. B. keep falling.
C. remain constant. D. rise first and then remain constant. E. remain constant at first then start to rise.
1.3.d (5 marks) If you are an investor and you wish to invest in debts issued by this firm, what of the following choice would be the best level of debt-to-equity ratio of this firm for you? A. 20%.
B. 50%. C. 100%. D. It doesn't matter.
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13a 5 marks Answer A keep rising As the debttovalue ratio of a company rises from 0 to 100 the finan...
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An Introduction To Statistical Methods And Data Analysis
Authors: R. Lyman Ott, Micheal T. Longnecker
7th Edition
1305269470, 978-1305465527, 1305465520, 978-1305269477
