Which of the Following Statements Is Correct

question 118

Multiple Choice

Which of the following statements is correct?

• A)The WACC measures the before-tax cost of capital.
• B)An increase in the firm's marginal corporate tax rate will decrease the weighted average cost of capital.
• C)Flotation costs can decrease the weighted average cost of capital.
• D)None of these statements is correct.

---

Definitions:

Law of Small Numbers

A cognitive bias that leads individuals to draw broad conclusions from small data sets or a limited number of observations.

Representativeness Heuristic

A cognitive shortcut that involves judging the likelihood of an event by comparing it to an existing prototype that comes to mind, often leading to errors in decision making.

Availability Bias

A cognitive bias where individuals overestimate the importance of information readily available to them.

Hard-Charging Manager

A highly motivated and aggressive manager who pushes themselves and their team towards achieving goals.