Answer:
The correct answer is letter "B": False.
Step-by-step explanation:
Cost of Capital is the cost of funds used to finance a business. Typically, corporations obtain financing by a combination of issuing equity in the form of shares and by taking on debt through borrowing from banks or issuing bonds. The people who provide the company with its capital also want to earn a return on their investment.
Thus, paying dividends is not the only obligation considered while calculating the cost of capital. Then, The cost of capital for an all-equity-financed company that pays no dividends is unlikely to be zero.