Which Is Not True About Debt Financing and the Weighted

question 51

Multiple Choice

Which 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.

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Definitions:

Ego Integrity

A sense of fulfillment and self-acceptance achieved in later life, reflecting back on one’s life with a sense of completeness and satisfaction.

Ego Integrity

A sense of satisfaction and completeness that comes from looking back on one’s life and feeling a sense of accomplishment and contentment, as proposed by Erik Erikson's stages of psychosocial development.

Dialectical Reasoning

A method of argument that involves the reconciliation of opposites, often leading to a synthesis of ideas or solutions.

Conscientiousness

A personality trait characterized by organization, dependability, and a strong sense of duty.