To determine the cost of each source of a firm's financing,management must think of the terms cost and return interchangeably,or as different sides of the same coin.

Question

Quizplus · Accepted Answer

This statement is true. Cost and return are two sides of the same coin as a firm's cost of financing is directly related to the expected return from that financing source. Management must consider both factors when determining the most cost-effective way to finance the firm's operations.

To Determine the Cost of Each Source of a Firm's