A company's current cost of capital is based on: A) only the return required by the company's current shareholders. D) both the returns currently required by its debtholders and stockholders. B) the current market rate of return on equity shares. C) the weighted costs of all future funding sources. E) the company's original debt-equity ratio.

The current cost of capital is the return necessary by the mix of equity and debt that a company uses to finance their operations and it helps to determine if a business should continue with a certain project. According to this, the answer is that a company's current cost of capital is based on both the returns currently required by its debtholders and stockholders.

The other options are not right because the current cost of capital considers the return expected by the different sources of capital and because of that options A and B are not the answer. Also, it is about the actual sources of capitl which eliminates option C. Additionally, the debt-equity ratio is about the amount of debt and equity that the company uses but it is not the basis for the company's current cost.

tallinn tallinn · Answer 2 · 2022-04-07T11:46:24+02:00

A company's current cost of capital is based on both the returns currently required by its debtholders and also stockholders. The correct option is 'D'.

What is the Current Cost of Capital?

When The current cost of capital is the return necessary by the mix of equity and also the debt that a company uses to finance its operations and also it helps to determine if a business should continue with a certain project. Then According to this, the explanation is that a company's current cost of capital is based on both the returns currently instructed by its debtholders and the stockholders.

The additional opportunities are not right because the current cost of capital assumes the return expected by the different sources of capital and because of that options A and B are not the answer. Also, it is about the actual sources of capital which eliminate option C.

Additionally, the debt-equity ratio is about the amount of debt and also the equity that the company uses but it is not the basis for the company's current cost.

Therefore, the Correct Option is 'D'.

Find more information about Current Cost of Capital here:

https://brainly.com/question/19532760