Q259
Which, among the following, are common misconceptions about cost of capital?
A.
Depreciation-generated funds have no cost
B.
Cost of capital is low if a project is heavily debt-financed
C.
Cost of equity is equal to the dividend rate
D.
All of the above
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Depreciation-generated funds have no cost, Cost of capital is low if a project is heavily debt-financed and Cost of equity is equal to the dividend rate are common misconceptions about cost of capital.