Cost of debt capital is lower than cost of equity capital

Assignment Help Financial Management

Reference no: EM131621029

In general, the cost of debt capital is lower than the cost of equity capital. For this reason, it might be expected that firms with high debt ratios would have a lower weighted average cost of capital. Explain at least one reason why this is not the case.

Reference no: EM131621029

Questions Cloud

Interest rates on bonds with default-free bonds is called : Holding large amounts of bank capital helps prevent bank failures because. The spread between the interest rates on bonds with default-free bonds is called

What was the composition and total remuneration : What position was held and what was the composition and total remuneration of the highest paid board member

Reconcile the bank statement with the account register : Before reconciliation, an account register balance is $1,817.93. The bank statement balance is $860.21. A service fee of $15 and one returned item of $213.83.

Immigration and the rise of urban centers : How was the second great awakening a response to societal pressures like immigration and the rise of urban centers?

Cost of debt capital is lower than cost of equity capital : In general, the cost of debt capital is lower than the cost of equity capital.

Federal funds are important sources of liquidity : Repurchase agreements and federal funds are important sources of liquidity. The cost of using these markets spiked after Lehman Brothers failed.

Write a brief biography of the individual you selected : Write a brief biography of the individual you selected. What was, or were the contribution(s) this individual made to the science of statistics?

Discuss accountant-client privilege for five years : Accountant-Client Privilege For five years, Chaple, an accountant licensed by the state of Georgia, provided accounting services to Roberts

Misused because of emotional value : KKK, for some, is considered a terrorist group. That is a loaded word and is often misused because of its emotional value.

User Account

All Pages