A Firm Has a Cost of Equity of 10 Per

question 41

Multiple Choice

A firm has a cost of equity of 10 per cent,a cost of preferred of 9 per cent,and an after tax cost of debt of 5 per cent.Given this,which one of the following will decrease the firm's cost of capital?

• A)exercising the call option on the debt
• B)decreasing the firm-specific risk associated with the firm
• C)issuing new debt to offset an increase in the dividend payout ratio
• D)increasing the systematic risk of the firm
• E)decreasing the debt-equity ratio

---

Definitions:

Meaningful Feedback

Constructive and detailed feedback that is valuable to the recipient, aiding in performance improvement and personal development.

Development Focus

An approach that prioritizes employee growth and learning as a key part of organizational strategy.

Trait Methods

Psychological analysis and assessment techniques that focus on identifying and measuring the characteristics, or traits, that make up an individual’s personality.

Biased

Showing prejudice for or against someone or something in a way that's considered unfair or unequal.