A company has a capital structure that consists of 50% debt and 50% equity. - 4589

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A company has a capital structure that consists of 50% debt and 50% equity. Which of the following is true?

a.The weighted average cost of capital is less than the cost of equity financing.

b.The cost of equity financing is greater than the cost of debt financing.

c.The weighted average cost of capital is calculated on a before-tax basis.

d.Both a and b.

c.All of the above.

 
Solution Description

A company has a capital structure that consists of 50% debt and 50% equity. Which of the following is true?