Multiple Choice
The cost to a firm of each type of capital is dependent upon ________.
A) the risk-free rate of bonds plus the business risk of the firm
B) the risk-free rate of each type of capital plus the business risk of the firm
C) the risk-free rate of each type of capital plus the financial risk of the firm
D) the risk-free rate of each type of capital plus the business risk and the financial risk of the firm
Correct Answer:

Verified
Correct Answer:
Verified
Q17: Tangshan Mining is considering issuing preferred stock.
Q18: One of the circumstances in which the
Q19: The _ is the rate of return
Q20: Table 9.2<br>A firm has determined its optimal
Q21: In computing the weighted average cost of
Q23: The cost of common stock equity refers
Q24: The target capital structure is the desired
Q25: The preferred capital structure weights to be
Q26: The Gordon model assumes that the value
Q27: The constant-growth model uses the market price