Which of the Following Is NOT Correct

question 154

Multiple Choice

Which of the following is NOT correct?

• A) The cost of equity is the return that equity investors require on their investment in the firm.
• B) The cost of equity can be found by either the dividend growth approach or the SML approach.
• C) The cost of debt is the return that lenders require on the firm's debt.
• D) If the firm has preferred stock in its capital structure, the cost of preferred stock should be included in the cost of capital.
• E) Book value capital structure weights should be used to calculate the WACC rather than market value weights.

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Definitions:

Design Thinking

An approach to problem-solving that involves empathy, creativity, and rationality to meet user needs and resolve complex issues.

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The practice of understanding and sharing the feelings of others, often utilized to enhance interpersonal relationships and communication.

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A method where one mimics or repeats exactly what another person has said, often used in language learning or negotiation strategies.