Use of the Marginal Cost of Capital

question 25

Multiple Choice

Use of the marginal cost of capital

• A) acknowledges that when retained earnings is used up as a source of equity the cost of capital rises as new common stock is sold to support more growth.
• B) recognizes that the return from the last dollar of funds generated should be equal to the cost of the last dollar of funds raised.
• C) two of the other answers are correct.
• D) none of the other answers are correct.

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Definitions:

Acceptance By Peers

The state or condition of being received favorably and regarded as a suitable member within one's peer group.

Rationalizing The Theft

involves justifying or providing logical reasons to legitimize the act of theft, often to alleviate guilt or to normalize the behavior.

Auto Thefts

The act of illegally taking possession of someone else's vehicle with the intent to permanently keep it.

Inadequate Law Enforcement

A situation where the law enforcement agencies are unable or fail to effectively enforce laws, leading to issues like increased crime and public distrust.