The Cost of Capital

question 89

Multiple Choice

The cost of capital:

• A) is the expected rate of return on a capital investment.
• B) is an opportunity cost determined by the risk-free rate of return.
• C) is the interest rate that the firm pays on a loan from a bank or insurance company.
• D) for risky investments is normally higher than the firm's borrowing rate.

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Definitions:

Commensalism

Species interaction that benefits one species and neither helps nor harms the other.

Mutualism

A type of symbiotic relationship between two species where both partners benefit from the interaction.

Predation

One species captures, kills, and eats another.

Parasitism

Relationship in which one species withdraws nutrients from another species, without immediately killing it.