The Weighted-Average Cost of Capital

question 104

Multiple Choice

The weighted-average cost of capital:

• A)blends the returns required by all suppliers of funds.
• B)incorporates the firm's capital structure in its calculation.
• C)is virtually never lower than the cost of debt nor higher than the cost of equity.
• D)All of the above

---

Definitions:

Monthly Withdrawals

Monthly withdrawals refer to the act of removing a specific amount of money from an account or investment at regular monthly intervals.

Compounded Monthly

Refers to the process of applying interest on both the initial principal and the accumulated interest from previous periods on a monthly basis.

Withdraw

The act of removing funds from an account.

Compounded Quarterly

Interest calculation method where interest is added to the principal sum of a deposit or loan every quarter.