Which of These Statements Is True Regarding Calculating Weights for WACC

question 32

Multiple Choice

Which of these statements is true regarding calculating weights for WACC?

• A) If we are calculating WACC for the firm, then equity, preferred stock and debt would be the entire book value of each source of capital.
• B) If we are calculating WACC for the firm, then equity, preferred stock and debt would be the entire market value of each source of capital.
• C) If we are calculating WACC for a project, then equity, preferred stock and debt would be the entire book value of each source of capital.
• D) If we are calculating WACC for a project, then equity, preferred stock and debt would be the entire market value of each source of capital.

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Definitions:

Commercial Innovation

A process or outcome that introduces new methods, products, or ideas into the market, improving efficiency, productivity, or offering new benefits to consumers.

Inflation Rate

The percentage increase in the general level of prices for goods and services in an economy over a period.

Store of Wealth

An asset or commodity that retains value over time and can be used to preserve or store purchasing power for the future.

Pay Cycle

The regular interval at which an employee receives their salary or wages from their employer.