What Is the Most Difficult Aspect in Determining a Firm's

question 110

Multiple Choice

What is the most difficult aspect in determining a firm's weighted average cost of capital?

• A)estimating the cost of equity.
• B)estimating the cost of preferred stock.
• C)estimating the cost of debt.
• D)deriving weights for each cost.

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Definitions:

Cash

Liquid currency and resources such as bank deposits that a business has immediate access to for transactions and operations.

Prepaid Insurance

Prepaid insurance is the portion of insurance premiums that has been paid in advance for coverage over future periods, and is classified as a current asset on the balance sheet.

Unearned Revenue

Money received by a business for services or products yet to be delivered or provided; considered a liability until the service or product is delivered.

Utilities Expense

The cost incurred by a business for the consumption of utilities services like electricity, gas, water, and sewage.