Which one of the following is the primary determinant of a firm's cost of capital?
A) Debt-equity ratio of any new funds raised
B) Marginal tax rate
C) Pretax cost of equity
D) Aftertax cost of equity
E) Use of the funds raised

Question

Quizplus · Accepted Answer

The primary determinant of a firm's cost of capital is the use of the funds raised, as it dictates the risk and potential return of the investment, influencing the overall cost of capital.

Which One of the Following Is the Primary Determinant of a Firm's