The Unlevered Cost of Capital Is

question 30

Multiple Choice

The unlevered cost of capital is:

• A) the cost of capital for a firm with no equity in its capital structure.
• B) the cost of capital for a firm with no debt in its capital structure.
• C) the interest tax shield times pretax net income.
• D) the cost of preferred stock for a firm with equal parts debt and common stock in its capital structure.
• E) equal to the profit margin for a firm with some debt in its capital structurE.

---

Definitions:

Working Memory

The component of short-term memory responsible for the immediate, conscious processing of perceptual and linguistic information.

Mnemonics

Memory aids, especially those techniques that use vivid associations or patterns of letters, ideas, or relational concepts to facilitate the recall of information.

Acronyms

Abbreviations formed from the initial letters of other words and pronounced as a word.

Unfamiliar Material

Information or content that is not previously known or recognized by an individual.