Which One of the Following Changes Would Tend to Increase

question 31

Multiple Choice

Which one of the following changes would tend to increase the WACC for a tax-paying firm?

• A) Decrease the proportion of equity financing
• B) Increase the market value of the debt
• C) Decrease the proportion of debt financing
• D) Decrease the market value of the equity

---

Definitions:

Percent Change

A mathematical calculation that indicates the percentage difference between two values, often used to measure growth or decline.

Initial Value

The starting amount before any additions, subtractions, or other changes are made.

Percent Change

A measure that indicates how much a quantity has increased or decreased in percentage terms over a specified period.

Wholesale Cost

The cost of goods purchased in large quantities directly from manufacturers or distributors before any markup for retail sale.