Match the following terms with their definitions:

TERMS Opportunity cost Financial policy Cost of capital DEFINITIONS The target mix of sources of funds that the firm uses when ralsing new money to Invest In the firm. A welghted average of the required rates of return of the firm's sources of capital (after adjusting for flotation costs and tax considerations). The cost of making a choice in terms of the next best alternative that must be foregone. The expenses that a firm Incurs when ralsing funds by issulng a particu- lar type of security. Transaction costs