Economy, asked by Hasanur2411, 9 months ago

The cost of capital for an all-equity-financed company that pays no dividends is zero.

a. True

b. False

Answers

Answered by rammy32
0

Explanation:

the cost of capital for an all equity financed company is ""false""

Answered by mindfulmaisel
3

Answer:

The ‘cost of capital’ for an ‘all-equity-financed company’ that ‘pays no dividends’ is zero. The given statement is False.

Explanation:

This is false since in an all-equity financed company there are equal shareholders who will go through an opportunity cost when they invest in the equity of a firm.

Because they are not using the present opportunities by investing funds in the given company, they will eventually look for a comparable rate of returns for the investments. Therefore eventually the company will have a ‘cost of capital’ for the investment.

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