11. If a business entity is industrially volatile to the state of the economy, what...
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11. If a business entity is industrially volatile to the state of the economy, what will be the effect of its cost of capital? (1 mark) A. The cost will be lower B. The cost will be higher C. The cost of capital is immune against the nature of the industry D. It totally depends on the financial stability of the company, not its nature of business. 12. If a company has low debt-to-equity ratio, the cost of capital for the issuing company will tend to be (1 mark) A. low B. unaffected by the ratio C. high D. significantly high 13. The increase in the cost of capital from the use of additional issuance of common stock after retained earnings are exhausted, the increase can be known as (1 mark) A. instantaneous rate of capital B. paid-in capital C. marginal cost of capital D. cost of retained earnings
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