Which of These Makes This a True Statement? When Determining

question 4

Multiple Choice

Which of these makes this a true statement? When determining the appropriate weights used in calculating a WACC, it should reflect

• A) the relative sizes of the total book capitalizations for each kind of security that the firm issues.
• B) the relative sizes of the total market capitalizations for each kind of security that the firm issues.
• C) only the market after-tax cost of debt.
• D) only the market after-tax cost of equity.

Differentiate between reasons for acquiring less than a 100% interest in a subsidiary.

Understand and apply the elimination entries for intercompany transactions.

Calculate non-controlling interest (NCI) on the consolidated statement of financial position.

Understand differences between the entity method and parent-company extension method in consolidations.