Multiple Choice
The cost of capital is used primarily in:
A) negotiations with banks because it reflects the company's overall borrowing power.
B) setting the firm's basic risk level.
C) capital budgeting because it reflects what the firm pays for the money it invests.
D) negotiations with investment bankers because it establishes an overall return on which the market can base prices for the firm's securities.
Correct Answer:
Verified
Correct Answer:
Verified
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