Cost of Equity Share Capital is more than cost of debt because:

Related MCQs

• Consider the below mentioned statements: 1. A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. 2. The cost of floating a debt is greater than the cost of floating an equity issue. State True or False:
• If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
• EVA= ___________ - (Equity capital x % of cost of equity capital
• The use of long term fixed interest bearing debt and preference share capital along with equity shares is called
• Cost Capital for Equity Share Capital does not imply that:
• Debt to Total Assets of a firm is .2. The Debt to Equity boo would be:
• Debt-to-total assets (D/TA) ratio is .4. What is its debt-to-equity (D/E) ratio?
• Equity shares of phonex Ltd are quoted in the market at Rs17. The dividend expected a year hence is Rs1.50. The expected rate of dividend growth is 8%. The cost of equity capital to the company is
• In the balance sheet amount of total assets is Rs.10 lac, current liabilities Rs.5 lac & capital & reserves are Rs.2 lac . What is the debt-equity ratio?
• The term optimal capital structure‘ implies that combination of external equity and internal equity at which ………