Which two of the following statements best apply to views on the cost of capital?
A) The shareholder wants to ensure that dividends exceed the return on other shares.
B) The shareholder wants an expected return appropriate for the risk, when compared with other investments.
C) The firm wants to know the cost, in terms of expected return, needed to induce purchase and retention of shares.
D) The firm wants to ensure that the cost of return is sufficient to overcome variation in future costs.
Correct Answer:
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