Financial Practitioners Include Short-Term Debt in WACC Calculations

question 62

Multiple Choice

Financial practitioners include short-term debt in WACC calculations:
I. If the short-term debt is at least 10% of total liabilities
II. If the short-term debt is at least 10% of the total assets
III. If the net working capital is negative
IV. If the net working capital is positive

• A) I and IV only
• B) I and III only
• C) II and IV only
• D) II and III only

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Definitions:

Attachment Theory

A psychological, evolutionary, and ethological theory concerning relationships between humans, primarily between caregivers and children.

EVLN Model

A framework used to describe responses to dissatisfaction in organizational settings, standing for Exit, Voice, Loyalty, and Neglect.

Conflict

A serious disagreement or argument, typically a protracted one, that can occur between individuals, groups, nations, or even ideas.

Active Way

Engaging or participating directly and purposefully in activities or processes.