The Difference Between the Weighted-Average Cost of Capital (WACC)and the Pre-Tax

question 62

Multiple Choice

The difference between the weighted-average cost of capital (WACC) and the pre-tax (unlevered) WACC is:

• A)the weighted-average cost of capital is based on the after-tax cost of equity and the pre-tax WACC is based on the after-tax cost of debt.
• B)the weighted-average cost of capital multiplies the cost of equity and the cost of debt by (1-tax rate)and the pre-tax WACC does not.
• C)the weighted-average cost of capital multiplies the cost of debt by (1-tax rate)and the pre-tax WACC does not.
• D)the weighted-average cost of capital multiplies the component costs of equity and debt by their weight in the capital structure,and the pre-tax WACC does not.

---

Definitions:

Vygotsky

A Soviet psychologist known for his work on cognitive development, including the concept of the Zone of Proximal Development.

Parenting Style

The psychological construct representing standard strategies that parents use in raising their children.

Permissive

A parenting or leadership style characterized by low demands with high responsiveness, where rules are minimal and children are allowed considerable freedom.

Authority Figures

Individuals recognized by others for having power or control, often in specific social, legal, or familial roles, and capable of influencing behavior.