For firms with relatively high levels of debt, the company cost of capital is the cost of equity of the firm.

Question

Quizplus · Accepted Answer

The company cost of capital typically includes both the cost of debt and the cost of equity, reflecting the overall cost of financing from all sources, not just equity. For firms with high levels of debt, the cost of debt significantly influences the company's overall cost of capital.

For Firms with Relatively High Levels of Debt, the Company