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:

Ankylosis

The abnormal stiffening and immobility of a joint due to the fusion of the bones.

Scoliosis

A condition characterized by an abnormal lateral curvature of the spine, which can vary in severity and cause pain and discomfort.

Metacarpal

The bones of the hand that are located between the wrist (carpal bones) and the fingers (phalanges).

Carpal

Refers to the bones forming the wrist which connect the hand to the forearm.