Which of the Following Statements Is CORRECT

question 23

Multiple Choice

Which of the following statements is CORRECT?

• A) Since debt capital can cause a company to go bankrupt but equity capital cannot,debt is riskier than equity,and thus the after-tax cost of debt is always greater than the cost of equity.
• B) The tax-adjusted cost of debt is always greater than the interest rate on debt,provided the company does in fact pay taxes.
• C) If a company assigns the same cost of capital to all of its projects regardless of each project's risk,then the company is likely to reject some safe projects that it actually should accept and to accept some risky projects that it should reject.
• D) Because no flotation costs are required to obtain capital as retained earnings,the cost of retained earnings is generally lower than the after-tax cost of debt.
• E) Higher flotation costs tend to reduce the cost of equity capital.

Describe the concept of internal borderland and its historical significance.

Understand the impact of strict constructionist views on federal power and their interpretation of the Constitution.

Comprehend the origins and political ideologies of the Republican Party in the 1790s.

Acknowledge the role of international figures and conflicts in shaping early American foreign policy and domestic politics.

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Definitions:

Top Executives

Senior-level personnel responsible for making overarching decisions and setting the strategic direction of a company.

Services

Intangible economic activities that satisfy consumer needs, such as healthcare, education, and financial services.

Loyalty

A strong feeling of support or allegiance to a person, group, or organization.

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.