How Would a Company's Cost of Capital Calculated from Book

question 64

Multiple Choice

How would a company's cost of capital calculated from book values be affected if the company's bonds were selling for more than face value?

• A)the cost of capital would increase.
• B)the cost of capital would decrease.
• C)the cost of capital would not be affected.
• D)the effect depends on the bonds' coupon rate.

Describe the consequences of changes in law on existing contracts.

Recognize the characteristics of severable contracts and their interpretation under contract law.

Understand exculpatory clauses and their limitations within contractual agreements.

Explain the concept of substantive and procedural unconscionability and its relevance to contract fairness.

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