There May Be a Change in the Marginal Cost of Capital

question 82

Multiple Choice

There may be a change in the marginal cost of capital curve because:

• A) the tax rate charged to investors changes.
• B) the firm has exhausted its supply of retained earnings.
• C) the firm is limited in the amount of amortization it can take.
• D) the firm has invested in a new project.

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Definitions:

Events A And B

Refers to two occurrences in probability and statistics that can be analyzed for their individual or joint likelihood.

Mutually Exclusive

Events that cannot happen at the same time.

Joint Probability

The probability of two events occurring simultaneously.

Independent

In statistics, refers to variables that are not affected by or related to the changes in other variables in the context of a study or model.