The Cost of Capital Is Defined as the

question 6

Multiple Choice

The cost of capital is defined as the

• A) simple average of the interest rates of all debt outstanding.
• B) simple average of the cost of debt and equity.
• C) weighted average of the interest rates of all debt outstanding.
• D) weighted average of the cost of debt and equity.

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Definitions:

Implied-in-Fact

A type of contract formed by the conduct of the parties involved, rather than written or spoken words.

Implied-in-Law

A term or condition not expressly stated but inferred by the nature of the transaction or the parties' conduct, as recognized by law.

Discharged by Agreement

A situation where the parties involved decide to release each other from the obligations of a contract, effectively ending the contract.

Operation of Law

Changes in legal rights or obligations that occur automatically due to established legal rules, without the need for action by the parties involved.