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    Business
  3. Study Set
    Principles of Finance
  4. Exam
    Exam 12: The Cost of Capital
  5. Question
    The Cost of Debt,r<sub>d</sub>,is Always Less Than R<sub>s</sub>,so R<sub>d</sub>(1 −
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The Cost of Debt,rd,is Always Less Than Rs,so Rd(1 −

Question 83

Question 83

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).

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