Which of the Following Statements Is Correct

question 71

Multiple Choice

Which of the following statements is correct?

• A) The cost of capital used to evaluate a project should be the cost of the specific type of financing used to fund that project, i.e., it is the after-tax cost of debt if debt is to be used to finance the project or the cost of equity if the project will be financed with equity.
• B) The after-tax cost of debt that should be used as the component cost when calculating the WACC is the average after-tax cost of all the firm's outstanding debt.
• C) The cost of equity is generally harder to measure than the cost of debt because there is no stated, contractual cost number on which to base the cost of equity.
• D) The bond-yield-plus-risk-premium approach is the most sophisticated and objective method for estimating a firm's cost of equity capital.

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Definitions:

Slander

The defamation action appropriate to oral defamation.

Libel

The defamation action appropriate to printed or written defamations, or to those that have a physical form.

Broadcasts

The distribution of audio or video content to a dispersed audience via any electronic mass communications medium.

Battery

An intentional tort that prohibits the harmful or offensive touching of another without his consent.