Question

In contrast to cost of capital, financial capital does what?

I1.s the combination of debt and equity reflects the firm's financial leverage
2.Refers to the debt and equity claims making up the liability side
3.Is a decision variable in financial planning

Answer 1

2.Refers to the debt and equity claims making up the liability side

Step-by-step explanation:

The cost of capital is the cost of the owners of the business gives to their investment

While the financial capital is the investment made for third parties in exchange of interest yields. Also it may be convertible to equity if preferred for the investor or based on terms in the contract.