The Approach to Computing the Cost of Equity Financing Which

question 29

Multiple Choice

The approach to computing the cost of equity financing which does not explicitly consider risk is called the:

• A) Weighted average cost of capital.
• B) After-tax cost of debt.
• C) Dividend growth model.
• D) Stock financing model.
• E) Security market line.

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Definitions:

Real Property

Land and any permanent structures on it, including buildings and natural resources, recognized as property that can be owned and transferred.

Assigns

Individuals or entities to whom rights or properties are legally transferred or assigned.

Further Obligations

Additional duties or responsibilities that may be required from a party subsequent to the completion of a particular transaction or event.

Community Property

A form of ownership between married couples commonly found in some states where all property acquired during the marriage is considered equally owned by both spouses.