Which of the Following Statements Is Correct

question 70

Multiple Choice

Which of the following statements is correct?

• A)The WACC is calculated using before-tax costs for all components.
• B)The after-tax cost of debt usually exceeds the after-tax cost of equity.
• C)Retained earnings that were generated in the past and are reflected on the firm's balance sheet are generally available to finance the firm's capital budget during the coming year.
• D)The WACC that should be used in capital budgeting is the firm's marginal, after-tax cost of capital.

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