The cost of capital to a firm is equal to
A) a risk-free rate plus an equity premium.
B) a risk-free interest rate.
C) an equity premium charged by lenders.
D) the Treasury bill rate minus an equity premium.
Correct Answer:
Verified
Q13: Capital structure refers to
A)the ratio of equity
Q14: A device used to measure the movement
Q15: The Capital Asset Pricing Model.
A)is a way
Q16: The cost of capital is a combination
Q17: The cost of capital is determined by
A)bankers.
B)the
Q19: The optimum capital structure
A)minimizes the cost of
Q20: The price of a bond and the
Q21: Beta measures the relative risk of a
Q22: The CAPM does not consider risk-free investments.
Q23: Stockholders manage risk by
A)electing the board of
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