Which of the Following Would Increase the WACC

question 176

Multiple Choice

Which of the following would increase the WACC?

• A)an increase in flotation costs
• B)a decrease in tax rates
• C)a decrease in preferred dividends
• D)Both a & b
• E)All of the above

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Definitions:

Unrealized Gains

Profits from investments that have increased in value but have not yet been sold for cash.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenues.

Gain Contingencies

Potential increases in assets or decreases in liabilities that may occur as a result of a future event, and which are acknowledged in financial statements if they are probable and can be reasonably estimated.

Footnote Disclosures

Explanatory notes added to the financial statements to provide more detailed information about certain figures.