The Component Parts of the Cost of Capital Should Be

question 62

Multiple Choice

The component parts of the cost of capital should be weighted by their proportion in the firm's

• A) current capital structure.
• B) historical capital structure.
• C) optimum capital structure.
• D) expected capital structure.

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Definitions:

Pay Note

A written promise to pay a specified sum of money to a designated party, also known as a promissory note.

Negotiable Instrument

A written promise or order to pay a specific amount of money that can be transferred by endorsement or delivery, such as checks and promissory notes.

Claim Negligence

The legal accusation that a party failed to exercise a reasonable standard of care, resulting in harm or damage to another.

Dishonor

The refusal or inability of an entity to fulfill a financial obligation, such as a check or bill.