Different Divisions with Differing Lines of Business Use Different Costs

question 89

Multiple Choice

Different divisions with differing lines of business use different costs of capital because their cost of equity is different and also because the ________ could be different.

• A)optimal asset mix
• B)optimal volatility
• C)optimal current ratio
• D)optimal debt-equity ratio

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Definitions:

Confidence Level

A statistical measure expressed as a percentage, indicating the degree of certainty that a parameter lies within a specified range in a confidence interval.