The company cost of capital, when the firm has both debt and equity financing, is called the: Multiple Choice A) weighted average cost of capital (WACC). B) cost of debt. C) return on equity (ROE). D) cost of equity.

The company cost of capital, when the firm has both debt and equity financing, is called the: Multiple Choice A) weighted average cost of capital (WACC). B) cost of debt. C) return on equity (ROE). D) cost of equity.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 19MCQ

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Question

The company cost of capital, when the firm has both debt and equity financing, is called the:

Multiple Choice

A) weighted average cost of capital (WACC).

B) cost of debt.

C) return on equity (ROE).

D) cost of equity.

Definition Definition Amount of return a company generally pays to its equity investors. The cost of equity represents the compensation required by the market in lieu of owning the asset firm and simultaneously bearing the risk of ownership.

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