The price a company’s stock is trading at has no impact on the cost of capital...
- The price a company’s stock is trading at has no impact on the cost of capital for a company raising capital.
- True
- False
Homework Answers
Please find below the solution… let me know if you need any clarification.
Statement is FALSE: The price a company’s stock is trading at has no impact on the cost of capital for a company raising capital.
When the cost of capital increased for the company raising its capital price will change. Higher the cost of capital higher will be expectation of the investor and thereore price will decline and vice versa.
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