Which of the Following Is NOT Correct

question 125

Multiple Choice

Which of the following is NOT correct?

• A) The cost of equity is the return that equity investors require on their investment in the firm.
• B) The cost of equity can be found by either the dividend growth approach or the SML approach.
• C) The cost of debt is the return that lenders require on the firm's debt.
• D) If the firm has preferred stock in its capital structure, the cost of preferred stock should be included in the cost of capital.
• E) Book value capital structure weights should be used to calculate the WACC rather than market value weights.

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Definitions:

Anti-Poverty Programs

Government or non-government initiatives designed to reduce or eliminate poverty by providing support and resources to the needy.

Inefficiency

The state of not achieving maximum productivity or economic benefit from resources due to suboptimal allocation, processes, or decisions.

Poverty Line

A threshold income level below which an individual or family is considered financially incapable of meeting basic living expenses.

Quartile

A statistical term describing each of four equal groups into which a population can be divided based on a particular variable.