Capital Structure Planning and Capital Budgeting Decisions Quiz

By weighting the cost of each component of capital based on their proportions in the overall capital structure.

The cost of each component of capital such as preference shares, debentures, and equity.

The weighted average cost of capital.

<p>The cost of raising an additional unit of capital.</p> Signup and view all the answers

<p>By taking the weighted average cost of additional funds.</p> Signup and view all the answers

<p>The cost that has already been incurred for financing a project.</p> Signup and view all the answers

<p>It is the expected cost of obtaining funds for financing a project.</p> Signup and view all the answers

<p>It provides insight into the cost of raising additional funds.</p> Signup and view all the answers

<p>Average cost is the weighted average cost of capital, while marginal cost is the cost of raising an additional unit of capital.</p> Signup and view all the answers

<p>By providing insights into the individual costs associated with different sources of financing.</p> Signup and view all the answers