Which of the Following Statements Is CORRECT

question 73

Multiple Choice

Which of the following statements is CORRECT?

• A)The WACC as used in capital budgeting is an estimate of a company's before-tax cost of capital.
• B)The percentage flotation cost associated with issuing new common equity is typically smaller than the flotation cost for new debt.
• C)The WACC as used in capital budgeting is an estimate of the cost of all the capital a company has raised to acquire its assets.
• D)There is an "opportunity cost" associated with using retained earnings, hence they are not "free."
• E)The WACC as used in capital budgeting would be simply the after-tax cost of debt if the firm plans to use only debt to finance its capital budget during the coming year.

---

Definitions:

User Account

It refers to the credentials and information that allow an individual access to computer systems and networks, often personalized to save settings and data.

MS Excel

A spreadsheet program by Microsoft used for data analysis, calculation, and visual representation of data.

MS Word

A widely used word processing software developed by Microsoft for creating and editing documents.

RAM

Random Access Memory, a type of computer memory that is used to store data temporarily while the computer is running.