Use of the Marginal Cost of Capital

question 35

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 lowers as new common stock is sold to support more growth.
• B) recognizes that the return from the last dollar of funds generated should be less than the cost of the last dollar of funds raised.
• C) 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.
• D) recognizes that the return from the last dollar of funds generated should be more than the cost of the last dollar of funds raised.

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Definitions:

Conclusion

The final part of a document or speech that summarizes the main points and often provides a closing thought or call to action.

Normal Accidents

Incidents that occur inevitably due to the complexity and interconnectivity of modern systems.

Deliberate Action

An intentional act or decision made consciously and with forethought.

Cyber Attacks

Malicious attempts to damage, disrupt, or gain unauthorized access to computer systems, networks, or devices.