Other Things Equal, a Firm That Must Obtain Its Long-Term

question 72

Multiple Choice

Other things equal, a firm that must obtain its long-term debt and equity in a highly illiquid domestic securities market will probably have a:

• A) relatively low cost of capital.
• B) relatively high cost of capital.
• C) relatively average cost of capital.
• D) cost of capital that we cannot estimate from this question.

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Definitions:

World Trade Organization

An international organization designed to supervise and liberalize world trade by providing a forum for negotiation and dispute resolution.

Members

In a business context, individuals or entities that are part of an organization, group, or system with certain rights or obligations.

World Trade

The exchange of goods and services across international borders and territories, impacting global economies, standards of living, and the development of nations.

Countries

Distinct territorial bodies or political entities recognized as independent states, characterized by their own government and boundaries.