The cost of capital for retained earnings

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Reference no: EM131998609

1. The cost of capital for retained earnings:

cannot be determined

may be determined by more than method

is greater than the cost of capital for common stock

is higher than the cost issuing bonds

2. You are considering two projects with the following cash flows: Year Project A Project B 1 $ 2,500 $ 4,000 2 3,000 3,500 3 3,500 3,000 4 4,000 2,500 Select ALL of the following statements that are true concerning these two projects

A. Both projects have the same future value given a zero rate of return.

B. Project A has a lower future value than Project B, given a positive rate of return.

C. both project have the same future value at the end of year 4, given a positive rate of return.

D. Both projects have the same future value at any point in time, given a positive rate of return.

Reference no: EM131998609

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