Archive for September 28th, 2009
September 28th, 2009 | 
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kzk_js asked:
As debt is substituted for equity in the capital structure and the debt ratio increases, the behavior of the overall cost of capital is partially explained by what?
A) the increase in the number of common shares outstanding.
B) the decrease in the cost of equity.
C) the tax-deductibility of interest payments.
D) the reduction in risk as perceived by the common shareholders.
Max Boling
As debt is substituted for equity in the capital structure and the debt ratio increases, the behavior of the overall cost of capital is partially explained by what?
A) the increase in the number of common shares outstanding.
B) the decrease in the cost of equity.
C) the tax-deductibility of interest payments.
D) the reduction in risk as perceived by the common shareholders.
Max Boling
Posted in Other - Business & Finance | 
Tags: Capital Structure, Correct Answer, Tax Deductibility | 
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