Reducing a firms cost of capital


Question: Discuss the validity of each of the following statements.

1. Leasing reduces risk and can reduce a firm's cost of capital.

2. Leasing provides 100-percent financing.

3. Firms that do a large amount of leasing will not do much borrowing.

4. If the tax advantages of leasing were eliminated, leasing would disappear.

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Finance Basics: Reducing a firms cost of capital
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