FIN-350 Module 7 DQ 2 - In general, the cost of debt capital is lower than the cost of equity….
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FIN-350 Module 7 DQ 2
Fundamentals of Business Finance – Short-Term Financial Decision Making
Grand Canyon University
In general, the cost of debt capital is lower than the cost of equity capital. For this reason, it might be expected that firms with high debt ratios would have a lower weighted average cost of capital. Explain at least one reason why this is not the case.