Partly as preferred stock and partly common equity

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Reference no: EM13948858

Why it's true or false

1- In case of conflict, one should always choose the IRR method (over the NPV method) because the IRR is inherently superior to the NPV method.

2- For capital budgeting and cost of capital purposes, the firm should assume that each dollar of capital is obtained in accordance with its target capital structure, which for many firms means partly as debt, partly as preferred stock, and partly common equity.

3- NPV and IRR methods are based on identical assumptions regarding reinvestment rate of future cash flows

Reference no: EM13948858

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