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Foundations of Financial Management Study Set 5
Quiz 11: Cost of Capital
In Determining the Cost of Debt, Yields and Prices of Outstanding
Question 78
True False
In determining the cost of debt, yields and prices of outstanding bonds are used.
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Related questions
Q 79
In determining the cost of preferred stock, the dividend yield on outstanding preferred stock may be used as a proxy.
Q 80
According to traditional financial theory, the cost of capital curve is U-shaped over the range of debt-equity mixes.
Q 81
The out-of-pocket cost of common stock is a good approximation of the cost of common stock equity.
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