According to the traditional approach cost of capital affected by?

debt-equity mix
debt-capital mix
equity expenses mix
debt-interest mix

The correct answer is: A. debt-equity mix.

The debt-equity mix is the proportion of debt and equity financing used by a company. The cost of capital is the rate of return that a company must earn on its investments in order to satisfy its investors. The debt-equity mix affects the cost of capital because it affects the risk of the company. A company with a higher proportion of debt financing has a higher risk, because it has more debt to repay. This higher risk means that investors demand a higher return on their investment, which increases the cost of capital.

The other options are incorrect because they do not affect the cost of capital. Debt-capital mix is not a term that is used in finance. Equity expenses mix is not a meaningful concept. Debt-interest mix is a subset of the debt-equity mix, and it does not affect the cost of capital in any way that is not already captured by the debt-equity mix.

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