Reference no: EM133000246

Problem 1: Which of the following statements is false concerning the cost of capital to a firm?

Select one:

a. It incorporates the cost of raising and using finance.

b. It represents the rate of return required by the firm's investors.

c. It is a short-term concept, suitable for evaluating short-term profit performance.

d. It is the return that a firm must earn in order to maintain the firm's value.

e. It is incorporated into the required returns set by management to evaluate proposed investments.