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The cost of capital should reflect the average cost of the various sources of long-term funds a firm uses to acquire assets?
Wiki User
∙ 12y ago
False
Wiki User
∙ 12y ago
Yes, the cost of capital is a weighted average of the various sources of long-term funds a firm uses, such as equity and debt. By considering the different costs and proportions of each source, the cost of capital provides a comprehensive measure of the overall cost of financing for the firm's assets.
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