Which of the following statements is false?
A)Other factors being constant, higher fixed costs mean a higher operating leverage.
B)Corporate bonds and notes provide no voting rights.
C)The cost of debt is the minimum acceptable rate of return to a firm on a project of average risk.
D)All of the above statements are true.

Question

Quizplus · Accepted Answer

The cost of debt is not the minimum acceptable rate of return on a project; it is the effective rate that a company pays on its borrowed funds. The minimum acceptable rate of return is typically referred to as the cost of capital or hurdle rate, which includes both debt and equity.

Which of the Following Statements Is False