Quiz Ch 10 – T/F Debt Cost and Weighted Average Cost of Capital

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: Typically, the cost of debt, rd, is lower than rs, making rd(1 - T) considerably smaller than rs. Consequently, unless the company is fully financed by debt, the weighted average cost of capital (WACC) generally surpasses rd(1 - T).

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  • Search Terms: a. b. false true (wacc) - as average be capital completely cost debt debt, financed, firm greater is less long much normally not of rd( rd, rs, rs. so t) t). than the therefore, weighted will
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