Which of the Following Statements Is Most Correct

question 34

Multiple Choice

Which of the following statements is most correct?

• A) Since stockholders do not generally pay corporate taxes, corporations should focus on before-tax cash flows when calculating the weighted average cost of capital (WACC).
• B) When calculating the weighted average cost of capital, firms should include the cost of accounts payable.
• C) When calculating the weighted average cost of capital, firms should rely on historical costs rather than marginal costs of capital.
• D) Answers a and b are correct.
• E) None of the answers above is correct.

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Definitions:

Information-gathering

The process of collecting data and insights from various sources for analysis, decision-making, or research purposes.

Identifying

The act of recognizing or distinguishing the characteristics or features of a person, object, or concept.

Interview

A formal meeting in which one or more persons consult, question, or evaluate another person.

Goal

A clear statement identifying something to be accomplished in the long term.