Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to each multiple choice question.
Each question is worth 2 marks

Which of the following statements is/are correct?
1 An increase in the cost of equity leads to a fall in share price
2 Investors faced with increased risk will expect increased return as compensation
3 The cost of debt is usually lower than the cost of preference shares
A 2 only
B 1 and 3 only
C 2 and 3 only
D 1, 2 and 3

Answer：

D

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