Cost of capital depends upon the historical cost of funds

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Reference no: EM131065708

TRUE or FALSE

1. The calculation of the cost of capital depends upon the historical cost of funds.

2. The discount rate that equates a future stream of expected dividends to the current price is a good approximation of the cost of common stock.

3. The cost of retained earnings is considered to be equal to the required rate of return on a firm's outstanding common stock.

Reference no: EM131065708

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