American_Bankers_Association
CTFA · Question #23
The cost of equity capital is all of the following Except:
The correct answer is D. Generally lower than the before-tax cost of debt. See the full explanation below for the reasoning.
Investment Management
Question
The cost of equity capital is all of the following Except:
Options
- AThe minimum rate that a firm should earn on the equity-financed part of an investment
- BA return on the equity-financed portion of an investment that, at worst, leaves the market price of
- CBy far the most difficult component cost to estimate
- DGenerally lower than the before-tax cost of debt
How the community answered
(45 responses)- A4% (2)
- B9% (4)
- C7% (3)
- D80% (36)
Topics
#cost of equity#capital structure#debt vs equity#component cost
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