Solved

The Cost of Debt, Rd, Is Always Less Than Rs

Question 48

True/False

The cost of debt, rd, is always less than rs, so rd(1 − T) will certainly be less than rs.Therefore, since a firm cannot be 100% debt financed, the weighted average cost of capital will always be greater than rd(1 − T).

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions