Two Factors That Cause the Investor's Required Rate of Return

question 116

Multiple Choice

Two factors that cause the investor's required rate of return to differ from the company's cost of capital are

• A)taxes and risk.
• B)transactions costs and risk.
• C)taxes and transactions costs.
• D)risk and opportunity cost differences.

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Definitions:

Antibiotic

Medicinal compounds used to kill or inhibit the growth of bacteria, used in the treatment and prevention of bacterial infections.

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A group of fat-soluble compounds that act as antioxidants, protecting the body from damage caused by free radicals.

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The state of carrying a developing fetus within the female body, typically lasting about 40 weeks from the last menstrual period to childbirth.