The Drawbacks of Which Forecasting Technique Include the Time and Costs

question 42

Multiple Choice

The drawbacks of which forecasting technique include the time and costs involved as well as the potential difficulty in integrating diverse opinions?

• A) A formal expert forecast
• B) The Delphi technique
• C) The nominal group technique
• D) An informal expert forecast
• E) Managerial judgment

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Definitions:

WACC

Weighted Average Cost of Capital, a calculation that reflects the average rate that a company is expected to pay on its securities, taking into account debt and equity.

Target Capital Structure

The mix of debt, equity, and other securities that a company aims to hold in order to finance its assets and operations ideally.

Flotation Costs

Expenses associated with issuing new securities, including legal, underwriting, and registration fees.

Effective Tax Rate

The average percentage of one's total income paid in taxes, factoring in all deductions and credits.