[amp_mcq option1=”Paid divident” option2=”Paid interest” option3=”Paid bonus” option4=”None of the above” correct=”option2″]<\/p>\n
The correct answer is: B. Paid interest<\/strong>.<\/p>\n Debt capital is money that a company borrows from lenders, such as banks, bondholders, and other investors. The cost of debt capital is the interest rate that the company pays on its loans. This interest rate is usually higher than the interest rate that a company pays on its own money, because lenders are taking on more risk when they lend money to a company.<\/p>\n The cost of debt capital is an important factor in a company’s financial planning. The company needs to make sure that the interest payments on its debt are affordable, and that the debt does not become too large a burden. The cost of debt capital is also an important factor in a company’s valuation. The higher the cost of debt capital, the lower the value of the company.<\/p>\n Option A is incorrect because dividends are paid to shareholders, not to lenders. Option C is incorrect because bonuses are paid to employees, not to lenders. Option D is incorrect because it is not a valid option.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Paid divident” option2=”Paid interest” option3=”Paid bonus” option4=”None of the above” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-46003","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\n