Which of the following statements is CORRECT?a. Since debt capital can

QUESTION

Which of the following statements is CORRECT?a. Since debt capital can cause a company to go bankrupt but equity capital cannot, debt is riskier than equity, and thus the after-tax cost of debt is always greater than the cost of equity.b. The tax-adjusted cost of debt is always greater than the
Option C is correct A project is accepted or rejected based on only the net present value(NPV).A project with positive NPV is accepted and with negative NPV is rejected but risk associated with the project is not taken

nto account.There might be some safe projects with a negative NPV which are rejected and some risky projects with positive NPV which are accepted.

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