HW 11 Flashcards
(3 cards)
1
Q
Katie owns 100 shares of ABC stock. What term is used to refer to the return that Katie and the other shareholders required on their investment in ABC?
A
Cost of equity
2
Q
Lester lent the money to The Corner Store by purchasing bonds issued by the store. The rate of return that he and the other lenders require is referred to as the
A
Cost of debt
3
Q
The weighted average cost of capital is defined as the weighted average of a firm’s
A
cost of equity, cost of preferred stock, and its aftertax cost of debt
