Select the one term that best fits each definition
-The ratio of interest and dividend payments to the proceeds from debt and capital financing.
A) bond
B) bond issue
C) capital expenditure
D) collateral
E) cost of capital
F) debt financing
G) equity financing
H) financial leverage
I) interest expense
J) issue date
K) line of credit
L) non-operating expenses
M) par value
N) preferred stock
O) prime interest rate
P) revenue expenditure
Q) stated interest rate

Question

Quizplus · Accepted Answer

The term "cost of capital" best fits the definition as it refers to the cost of a company's funds (both debt and equity), or, from an investor's point of view, the required rate of return on a portfolio company's existing securities. It encompasses the expenses of interest and dividends related to financing activities.

Select the One Term That Best Fits Each Definition