Which of the Following May Be True of the Cost

Multiple Choice

Which of the following may be true of the cost of debt and cost of equity?

A) The weighted average cost of capital is computed by assigning weights to the cost of debt and the cost of equity of a firm.
B) The cost of debt for a firm is always equal to the cost of equity to the firm.
C) The cost of internally generated equity for a firm is greater than the cost of externally generated equity funds for the firm.
D) The cost of internally generated equity for a firm is less than the cost of debt for the firm.
E) The cost of externally generated equity is the sum of the cost of debt and the cost of retained earnings.