Which of the Following Statements Is Correct

question 13

Multiple Choice

Which of the following statements is correct?

• A) The weighted average cost of capital is calculated on a before-tax basis.
• B) An increase in the market risk premium is likely to increase the weighted average cost of capital.
• C) The weights of debt and equity should be based on the balance sheet because this is the most accurate assessment of the valuation.
• D) All of these choices are correct.

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Definitions:

Productivity

The measure of efficiency in which goods and services are produced, often quantified as output per unit of input.

Input/Output

A concept referring to the materials, information, or effort (input) going into a process and the resulting product, services, or results (output) produced.

Output/Input

A ratio that measures the efficiency of production or performance by comparing what is produced (output) to what is consumed or used (input).

Continuous-Process Production

A manufacturing process that produces goods continuously rather than in discrete batches, often used in industries like chemicals, oil, and gas.