Which of the Following Is NOT a Capital Component When

question 76

Multiple Choice

Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting?

• A) Long-term debt.
• B) Accounts payable.
• C) Retained earnings.
• D) Common stock.
• E) Preferred stock.

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Definitions:

Operating Expenditure

The costs associated with the day-to-day operations of a business, including salaries, rent, and utilities.

Financial Position

The snapshot of a company's assets, liabilities, and equity at a specific point in time, providing insight into its economic resources and obligations.

Operating Condition

The current state and functioning status of a company's operational processes and resources.