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Basic Question 11 of 14
Which of the following statements is false?
B. The cost of capital is independent of the funds used to finance the project.
C. The cost of capital is independent of the funds the firm typically uses.
D. The cost of capital is the weighted average of the various types of funds a firm generally uses.
A. The first element in the capital budgeting decision is determining the proper discount rate or cost of capital.
B. The cost of capital is independent of the funds used to finance the project.
C. The cost of capital is independent of the funds the firm typically uses.
D. The cost of capital is the weighted average of the various types of funds a firm generally uses.
User Contributed Comments 3
| User | Comment |
|---|---|
| mtcfa | I agree with C, nut I thought the 1st step was to decide which projects you want to consider. |
| JP09 | The cost of capital is DEPENDENT on the funds the firm typically uses. |
| missmalik | My answer is C. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
calculate and interpret the weighted-average cost of capital for a company
CFA® 2025 Level I Curriculum, Volume 2, Module 6.