The return that lenders require on the firm debt

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Reference no: EM131352287

Which of the following is NOT correct?

a. The cost of debt is the return that lenders require on the firm's debt.

b. Book value capital structure weights should be used to calculate the WACC rather than market value weights.

c. The cost of equity can be found by either the dividend growth approach or the SML approach.

d. The cost of equity is the return that equity investors require on their investment in the firm.

e. If the firm has preferred stock in its capital structure, the cost of preferred stock should be included in the cost of capital.

Reference no: EM131352287

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