Use of the Marginal Cost of Capital

question 77

Multiple Choice

Use of the marginal cost of capital

• A) acknowledges that when retained earnings are 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 greater than or equal to the cost of the last dollar of funds raised.
• C) acknowledges that when retained earnings are used up as a source of equity, the cost of capital rises as new common stock is sold to support more growth and recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
• D) None of these options are correct.

---

Definitions:

Stapes

The smallest bone in the human body, located in the middle ear, playing a critical role in the conduction of sound vibrations to the inner ear.

Oval Window

A membrane-covered opening that leads from the middle ear to the inner ear, playing a key role in the mechanics of hearing.

Vomeronasal Organ

Pheromone-detecting organ of vertebrates.

Pheromones

Pheromones are chemical substances produced and released into the environment by an animal, affecting the behavior or physiology of others of its species.