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.

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Definitions:

Message

Information conveyed in the sales presentation.

Evaluative Listening

Listening with the purpose of analyzing and assessing the message being communicated, often in decision-making contexts.

Active Listening

The practice of fully concentrating, understanding, responding, and remembering what is being said in a conversation.

Listener

An individual who gives attention to sound or is in the act of hearing, often used in the context of audiences for audio media such as music, radio, or podcasts.