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

---

Definitions:

Renowned Poet

A highly recognized and distinguished poet, celebrated for their significant contributions to poetry.

Analytical

Pertaining to or proceeding by analysis (i.e., separating a whole into its constituent parts to examine or determine their relationship).

Practical

Concerned with actual use or practice rather than with theory or speculation.

Creative

The ability or quality of producing something original and worthwhile, typically through imaginative skill or artistry.