An Increase in Which One of the Following Is Most

question 14

Multiple Choice

An increase in which one of the following is most apt to decrease the WACC of a firm that has both debt and equity in its capital structure?

• A) Firm's beta
• B) Market rate of return
• C) Tax rate
• D)Yield on preferred stock

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Definitions:

Operating Lease

A lease agreement for the use of an asset without ownership transfer, typically involving payments for a period shorter than the life of the asset.

Required To Maintain

Obligatory actions or measures needed to keep a system, process, or asset in working order or to uphold a specific condition.

Manufacturer

A company or individual that produces finished goods from raw materials through the use of machinery and labor, involved in the industrial sector of the economy.

Direct Lease

A lease agreement where the lessee directly leases the asset from the owner or lessor without using a third party.