Which One of the Following Statements Related to WACC Is

question 54

Multiple Choice

Which one of the following statements related to WACC is correct for a company that uses debt in its capital structure?

• A) The WACC would most likely decrease if the firm replaced its preferred stock with debt.
• B) The weight assigned to preferred stock decreases as the market value of the preferred stock increases.
• C) The WACC will decrease as the corporate tax rate decreases.
• D) The weight of equity is based on the number of shares outstanding and the book value per share.
• E) The WACC will remain constant unless a company retires some of its debt.

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Definitions:

Phenotype

The observable physical or biochemical characteristics of an organism, as determined by both genetic makeup and environmental influences.

Puberty

The developmental stage in humans and other primates marked by the onset of sexual maturity and other physiological changes.

Gender Identity

The degree to which a person feels male or female.

Born

Refers to the process of coming into life or existence; often used in the context of birth or the point at which an organism or entity begins its existence.