CFA Practice Question

CFA Practice Question

Which of the following is incorrect?
A. To maximize profit, a firm should raise capital and invest in projects to the point where the IOS intersects with the MCC.
B. The Investment Opportunity Schedule (IOS) is the plot of the IIR of projects available to a firm, against the dollar amounts needed for the projects.
C. The marginal cost of capital (MCC) is the total dollar return (paid to investors) divided by total dollar capital raised by a firm.
Explanation: The marginal cost of capital (MCC) is the cost of the last dollar a firm raises.

User Contributed Comments 0

You need to log in first to add your comment.