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Which of the following statements about the corporate cost of capital is most correct ? The cost-of-capital estimate is a before-tax estimate. The effective (after-tax)
Which of the following statements about the corporate cost of capital is most correct?
The cost-of-capital estimate is a before-tax estimate. |
The effective (after-tax) cost of debt to similar for-profit and not-for-profit businesses is roughly the same in most situations. |
Preferred stock and short-term debt are never included in the cost-of-capital estimate. |
The corporate cost-of-capital estimate is based on the cost of embedded (current) capital. |
The corporate cost-of-capital estimate is based on the cost of embedded (current) debt coupled with the cost of newly issued equity. |
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