Which of the Following Is Not True About Debt Financing

question 37

Multiple Choice

Which of the following is not true about debt financing and the weighted average cost of capital?

• A)Debt is usually the cheapest source of financing.
• B)As the level of debt increases beyond the optimum capital structure, the cost of capital increases.
• C)No debt in the firm's capital structure will minimize the firm's weighted average cost of capital.
• D)None of these options

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Definitions:

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