When Determining a Firm's Weighted Average Cost of Capital (WACC)

question 10

Multiple Choice

When determining a firm's weighted average cost of capital (WACC) , which of the following terms is NOT necessary?

• A) the firm's tax rate
• B) the firm's cost of debt
• C) the firm's cost of equity
• D) All of the above are necessary.

---

Definitions:

Purported Shareholders

Individuals or entities that are claimed to hold shares or ownership in a company, possibly without formal recognition.

Conditions Precedent

Specific conditions that must be met before a contract becomes effective or before an obligation to perform is triggered.

De Jure

According to rightful entitlement or claim; by right of law, often distinguishing legal authority or legitimacy from de facto (or actual) power or control.

De Facto

A term used to describe practices that exist in reality, even though they are not officially recognized by laws.