Q420
In weighted average cost of capital, rising in interest rate leads to
A.
increase in cost of debt
AnswerB.
increase capital structure
C.
decrease in cost of debt
D.
decrease capital structure
Answer: Option A
Solution
Answer: Option A
Solution:
In weighted average cost of capital, rising in interest rate leads to increase in cost of debt. Cost of debt is one part of a company's capital structure, which also includes the cost of equity.