Which of the following statements are true? The opportunity cost of capital: a. Equals the interest rate

Question:

Which of the following statements are true? The opportunity cost of capital:

a. Equals the interest rate at which the company can borrow.

b. Depends on the risk of the cash flows to be valued.

c. Depends on the rates of return that shareholders can expect to earn by investing on their own.

d. Equals zero if the firm has excess cash in its bank account and the bank account pays no interest.

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...