Which of the Following Is NOT a Property Necessary for a Consistent

question 5

Multiple Choice

Which of the following is NOT a property necessary for a consistent estimate of the WACC?

• A)It uses book-value-based weights.
• B)It includes the opportunity cost of all investors.
• C)It includes related costs/benefits such as the interest tax shield.
• D)The duration of the securities used in estimating the WACC equals the duration of the free cash flows.

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Definitions:

Company Shareholders

Individuals or entities that own shares in a company, giving them partial ownership and a stake in its future profits.

Angel

A rich individual funding a start-up company, typically in exchange for convertible debt or an equity share.

Equity Crowdfunding

A method of raising capital through the sale of shares in a company to a large number of investors, typically through online platforms.

JOBS Act

The Jumpstart Our Business Startups Act is legislation in the United States intended to encourage the funding of small businesses by easing various securities regulations.