Which of the following descriptions of the component costs of capital is INCORRECT?
A) The cost of preferred shares, Kp, is estimated as the current dividend yield on any existing preferred shares or shares of similar firms.
B) The cost of debt, Kd, is estimated as the after-tax cost of issuing new debt (such as bonds) today.
C) The cost of debt is estimated using the CAPM as the risk-free rate or long-term government bond yield plus beta times a market risk premium.
D) All of the above are correct.
C
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The balance sheet omits many items that are of financial value to the business but cannot be recorded objectively.
a. true b. false
Representatives who are taught the SPIN method to build long-term relationships may ask each of the following types of questions EXCEPT ________
A) situation B) speculation C) problem D) need-payoff E) implication