Which of the Following Is NOT True About Debt Financing

question 14

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 are false.

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Definitions:

Ethical Responsibility

A moral obligation to act correctly and make decisions that positively affect people and the environment, often referenced in professional contexts.

Competent Care

The provision of effective, appropriate, and skilled nursing or medical services to patients by healthcare professionals.

Utilitarianism

A moral theory that suggests that the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Ethical Framework

A structured set of guidelines designed to help individuals and organizations make decisions that align with moral values and ethical principles.