When Should Short- Term Debt Be Included When Calculating WACC

question 42

Multiple Choice

When should short- term debt be included when calculating WACC?

• A) Always
• B) Only for a public, listed company
• C) Only for a private company
• D) Never

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Average Repair Cost

The mean cost incurred for repairing an asset over a certain period, calculated by dividing the total repair costs by the number of repairs.

FICA Taxes

Taxes imposed by the Federal Insurance Contributions Act, which fund Social Security and Medicare, split between employees and employers.

Federal Unemployment Insurance

A government-provided insurance scheme that offers payments to eligible unemployed workers.