When One Uses the After-Tax Weighted Average Cost of Capital

question 79

Multiple Choice

When one uses the after-tax weighted average cost of capital (WACC) to value a levered firm, the interest tax shield is

• A)not accounted for by the use of the WACC.
• B)considered by deducting the interest payment from the cash flows.
• C)automatically considered because the after-tax cost of debt is included within the WACC formula.
• D)capitalized by the levered cost of equity.

---

Definitions:

DNA

Deoxyribonucleic acid, or DNA, is the molecule containing genetic directives crucial for the growth, development, activity, and reproduction in all identified living organisms as well as numerous viruses.

Comparative Genomics

The field of biological research in which the genomic features of different organisms are compared to understand their evolutionary relationships and functional biology.

Animal Models

Non-human species used in research and experiments to understand biological processes and diseases affecting humans.

Gene Targeting

A molecular biology technique that uses homologous recombination to modify the genome of an organism at a precise location.