Which of the Following Statements Is Correct

question 60

Multiple Choice

Which of the following statements is correct?

• A)The weighted average cost of capital is calculated on a before-tax basis.
• B)An increase in the market risk premium is likely to increase the weighted average cost of capital.
• C)The weights of debt and equity should be based on the balance sheet because this is the most accurate assessment of the valuation.
• D)All of these statements are correct.

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Definitions:

Functional Strategy

A specific, detailed plan developed for departments such as marketing, finance, or production, focusing on achieving departmental goals aligned with the company’s overall strategy.

Business Strategy

A plan of action employed by businesses to achieve competitive advantage and meet their goals.

Implementing Strategy

The actions, steps, and practices involved in carrying out strategies to achieve organizational goals.

Corporate Strategy

The overall plan or direction that a company adopts in order to achieve its long-term goals and objectives.