Which of the Following Statements Is True

question 3

Multiple Choice

Which of the following statements is true?

• A) The cost of capital declines as more debt is added to the capital structure
• B) The cost of capital increases as more debt is added to the capital structure
• C) Equity is generally cheaper than debt
• D) Debt is generally cheaper than equity

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Definitions:

Remanufacturing

The process of restoring used products to a condition of quality comparable to that of new products, often involving disassembly, cleaning, repair, and reassembly.

Margins

The difference between the cost of producing goods and the selling price, often expressed as a percentage of revenue.

Cube Utilization

A measure of how effectively the storage space of a container or area is used, aiming to maximize the amount of goods stored while minimizing wasted space.

Web-based Scorecard

An online tool that displays performance metrics and benchmarks to track and evaluate operational success.