Multiple Choice
Use of the marginal cost of capital
A) acknowledges that when retained earnings are used up as a source of equity, the cost of capital rises as new common stock is sold to support more growth.
B) recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
C) acknowledges that when retained earnings are used up as a source of equity, the cost of capital rises as new common stock is sold to support more growth and recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
D) None of these options are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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