In large expansion programs, increased riskiness and floatation cost associated with project can cause
A. rise in marginal cost of capital
B. fall in marginal cost of capital
C. rise in transaction cost of capital
D. None of the above
Answer: Option A
Solution (By Examveda Team)
In large expansion programs, increased riskiness and floatation cost associated with project can cause rise in marginal cost of capital. Marginal cost of capital is the weighted average cost of the last dollar of new capital raised by a company. It is the composite rate of return required by shareholders and debt-holders for financing new investments of the company.This Question Belongs to Commerce >> Financial Management
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