The Cost of Capital Is the Same as the Cost

question 21

Multiple Choice

The cost of capital is the same as the cost of equity for firms that are financed:

• A)entirely by debt.
• B)by both debt and equity.
• C)entirely by equity.
• D)by 50% equity and 50% debt.

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Definitions:

Tornado

A violently rotating column of air that extends from a thunderstorm to the ground, known for its potential to cause widespread destruction.

Intestate

The state of dying without a valid will, resulting in one's assets being distributed according to statutory guidelines.

Single Mother

A woman who has a dependent child or dependent children and who is widowed, divorced, or unmarried.

Stepchildren

Children brought into a family by a new spouse who are not the biological offspring of that spouse.