Question
With respect to issues related to the cost of capital: A. An increase in the debt ratio will result in greater risk for debt holders
With respect to issues related to the cost of capital:
A. An increase in the debt ratio will result in greater risk for debt holders but not equity holders.
B. The cost of capital is the return a firm must earn before tax to satisfy security holders.
C. The WACC is the correct discount rate for average-risk projects.
D. The expected return on equity is relevant to capital budgeting decisions.
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Authors: Mark Graham
1st Edition
0648678830, 978-0648678830
