Which one of the following is the primary determinant of a firm's cost of capital? multiple choice marginal tax rate use of the funds raised pretax cost of equity aftertax cost of equity

Question

16-08-2022
Business

contestada

Which one of the following is the primary determinant of a firm's cost of capital? multiple choice marginal tax rate use of the funds raised pretax cost of equity aftertax cost of equity

Respuesta :

Otras preguntas

which situation could be modeled by using a linear function ? 1) a bank account balance that grows at a rate of 5% per year compounded annually 2) a population

which of the following is a fertilized egg? a blastula b zygote c blastopore d pseudocolem

What is the meaning of the phrase "thou art wedded to calamity”? You have not had enough disaster in your life. You often have disaster around you. Your marriag

Find the ordered pairs for the x- and y-intercepts of the equation 3x - 2y =18

In preindustrial times, families had to provide for their own needs by a. growing their own food. c. building their own house. b. making their clothes. d. a

What took place in Rwanda that resulted in the deaths of hundreds of thousands of people?

The end points of one side of a regular pentagon are (-1,4) and (2,3). What is the perimeter of the pentagon? (1) the square root of 10 (2) 5 times the square r

Without generalizing, inductive reasoning is not possible. a. True b. False

You can Drive your car 21.75 miles with 1 gallon of gasoline how many miles can you drive with 13.2 miles of gasoline

ACCESS MORE

QWCyan QWCyan · Answer 1 · 2022-08-22T12:22:00+02:00

The use of the funds raised is the primary determinant of the cost of capital of a firm. When a firm starts its operations or even when the business is going on the business may require some funds from outsiders. This fund that they are arranging will have to be properly analyzed. As the business will have to pay interest on the capital borrowed.

The marginal rate tax is the extra tax the company will have to pay if they want to produce one more good. The pre-tax cost of equity is the tax to be paid by the company before the equity shares are sold in the market. The cost of equity is the capital that the businessman uses in his business. So the use of the funds raised will determine the company's cost of capital.

The interest that the business has to pay for the different sources from where it can obtain the capital is a very important determinant. This will have to be studied properly as a wrong choice will increase the cost of capital of the firm.