Which of the Following Statements Regarding the Cost of Capital

question 59

Multiple Choice

Which of the following statements regarding the cost of capital is (are) correct?
I. The weighted cost of capital is the discount rate used when computing the net present value.
II. The after-tax cost of capital is weighted by the proportions of the capital components in the firm's long-range target capital structure.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements I and II are correct.
• D) Neither statement I nor II is correct.

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Definitions:

People of Each State

The residents or citizens within the territorial boundaries of a state, who are subject to its laws and government.

Members

Individuals who belong to a group, organization, or community, sharing common interests or goals.

Political Participation Rates

The proportion of eligible individuals who engage in activities to influence public policy or government, including voting, protesting, and campaigning.

Blacks

A term referring to individuals of African descent, often used in the context of discussing racial identities, histories, and communities.