Ignoring Taxes,a Firm's Weighted-Average Cost of Capital Is Equal To

question 122

Multiple Choice

Ignoring taxes,a firm's weighted-average cost of capital is equal to:

• A) its expected return on assets.
• B) its expected return on equity.
• C) the sum of expected return on equity and expected return on debt.
• D) its expected return on assets times the debt-equity ratio.

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Definitions:

Equilibrium Price

The equilibrium price where the supply of goods meets the demand for those goods in the marketplace.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market price.

Simultaneous Decrease

A situation where two or more economic variables or quantities decline at the same time.

Demand Curve

The Demand Curve is a graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers, typically downward sloping.